Donald Tusk, the president of the European council, warned on Monday that positions were hardening on Britain’s future in Europe ahead of the crucial summit he will chair on Thursday and the risk of break-up was real.

David Cameron scrapped a debate at the European parliament on Tuesday and scheduled a meeting with Jean-Claude Juncker, president of the European commission, amid fears that a proposed settlement geared to keeping the UK in the EU could unravel because of growing European objections to the concessions promised to Britain.

“This is a critical moment,” Tusk warned. “It is high time we started listening to each other’s arguments more than to our own. It is natural in negotiations that positions harden, as we get closer to crunch time. But the risk of break-up is real because this process is indeed very fragile. Handle with care. What is broken cannot be mended.”

The stark warning from the former Polish prime minister, who presides over the EU summit on Thursday and who has been charged with drafting the settlement rewriting the terms of Britain’s EU membership, came as east European leaders staged a mini-summit in Prague to hammer out a common position on the proposed British deal.

Bohuslav Sobotka, the Czech prime minister, who chaired the meeting of four central European countries – Poland, Slovakia, Hungary, and the Czech Republic – said they had agreed a position but that he would not divulge it before informing Tusk.

Tusk is expected in Prague on Tuesday. “We will all have to decide together, and where we cannot and will not compromise on the fundamental freedoms and values,” Tusk said.

Cutting welfare benefits for east European workers in western Europe is the main sticking point threatening to wreck a putative deal negotiated since last July and fine-tuned over the past fortnight.

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Cameron’s central demands of freezing in-work benefits for four years for EU migrant workers in the UK and cutting child benefits for the same workers who leave their offspring at home have already been watered down in the draft agreement but remain unacceptable for the east Europeans.

They will accept the curbs, but only if they are limited to Britain and are not applied across the EU. This applies in particular to child benefits, which, at the moment, are not to be scrapped but indexed to east European levels.

The central European quartet will accept that for the sake of a deal with Cameron but do not want the UK special treatment broadened to apply uniformly across the EU. They also fear eventual knock-on effects in other areas of national social security systems in Europe.

It emerged that this is the key stumbling block for Cameron at the summit, although there are ample other issues still to be resolved.

“Indexation of child benefit will be at the core of the discussions” with Cameron on Tuesday, Juncker said.

The prime minister is likely to come under pressure to relinquish his child benefits gains for the sake of a deal on Thursday. To do so would invite howls of protest from dissidents within the Conservative party.

Cameron also agreed on Monday to hold an emergency cabinet meeting on Friday if he secures a summit deal, raising the prospect that a four month referendum campaign could be under way within days.

The move will be seen as a concession to Eurosceptic ministers who had feared they would be unable to speak out while the prime minister uses the weekend to campaign in favour of Britain’s membership of the EU.

Cameron is due to make an appearance on the Andrew Marr Show on BBC1 on Sunday morning to spell out his case to keep Britain in a reformed EU in a referendum he hopes to hold on 23 June. The anti-EU Grassroots Out group will hold a rally in Westminster on Friday afternoon.

The prime minister would use the cabinet meeting, which would have to take place late on Friday afternoon after the formal conclusion of the European council in Brussels, to trigger the formal lifting of collective cabinet responsibility. This would mean that ministers who want to campaign for a UK exit from the EU would be free to reject the EU deal. Iain Duncan Smith, the work and pensions secretary, is expected to lead a list of around five cabinet ministers who will campaign for a Brexit. He is expected to be joined by Theresa Villiers, the Northern Ireland secretary; John Whittingdale, the culture secretary; Chris Grayling, the leader of theCommons; and Priti Patel, who attends the cabinet as employment minister.

Cameron has made clear that he will impose some restrictions on cabinet ministers who want Britain to leave the EU. They will be expected not to campaign in an aggressive way and he will take a less tolerant view of anti-EU campaigners who have little or no track record of Euroscepticism.

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Tensions in the Tory party over Europe burst into the open when Sir Nicholas Soames, the former defence minister, told the Eurosceptic former leadership contender John Redwood to “bugger off”. Soames tweeted his disapproval after Redwood advised Tory MPs who won selection contests after telling local association they were Eurosceptic to be true to their vote and to vote to leave the EU. Soames tweeted: “I must say to be told how to vote in referendum by J Redwood in an email to colleagues marks a new low in my life in the house #buggeroff.”

Cameron will head to Brussels for a meeting on Tuesday morning with the president of the European parliament, Martin Schulz, and the MEPs delegated by the parliament as “sherpas” for the negotiations. They are Guy Verhofstadt, the former Belgian prime minister who is leader of the Alliance of Liberals and Democrats for Europe, Elmar Brok, a leading member of Angela Merkel’s CDU party, and Roberto Gaultieri, of the Socialists.

In a change of plan, the prime minister will not meet the “conference of the presidents” – the leaders of all eight pan-European groupings in the parliament. Cameron will instead just meet the leaders of the two largest groupings in the European parliament: Manfred Weber, the chairman of the European People’s party, and Gianni Pittella, chairman of the Progressive Alliance of Socialists and Democrats.

The change of plan means that the prime minister will not meet Nigel Farage, who is the joint president of the Europe of Freedom and Direct Democracy Group. Downing Street felt that it would be a better use of the prime minister’s time to meet the leaders of the main groupings and not provide a platform for the likes of Farage to take potshots at him.

The prime minister needs to win over the leaders of the main groupings to persuade them not to veto any package of reforms agreed by national leaders. Downing Street has said that the government is seeking to secure an agreement that will be “legally binding” on the EU’s 28 leaders.

But EU leaders have no ability to bind the European parliament, which could block the secondary legislation that will be needed to restrict in-work benefits to EU migrants and to ensure that child benefit is paid at the rate of an EU migrant’s home country. Downing Street believes that a declaration by EU leaders, plus supportive statements from the main leaders in the European parliament, will make it difficult to unstitch a deal.

The Vote Leave campaign group said that the decisive role of the European Parliament – plus the government’s acknowledgment that it will not secure a revision of the Lisbon treaty before the referendum – means that the deal would amount to no more than an unsigned contract. The government wants to secure a legally binding agreement that would be attached to the next EU treaty in the way that a series of concessions to Denmark, following its initial rejection of the Maastricht treaty, were grouped together in a special protocol.

In a report, Vote Leave concludes: “The only way to obtain ‘legally binding and irreversible’ change to the UK’s relationship with the EU is to Vote Leave.”