The European Union is keen to strike a pact with Muammar Gaddafi to stem the flow of immigrants across the Mediterranean, officials said today, after the Libyan leader put a price tag of €5bn (£4.1bn) a year on the deal.

"There is great scope to develop cooperation with Libya on migration," said Matthew Newman, a commission spokesman. Other officials said three negotiating sessions were expected by the end of the year between Brussels and Tripoli as well as the staging of a summit of EU and African leaders in Libya in November.

In a highly theatrical visit to Italy this week, Gaddafi warned that Europe would turn "black" unless it was more rigorous in turning back immigrants. Libya is a key transit point for illegal migration from Africa to Europe. The Libyan leader said the bill for sealing the crossing routes would be at least €5bn a year.

While the commission in Brussels said that much could be achieved with Libya "for lesser amounts than that named by Colonel Gaddafi", Franco Frattini, the Italian foreign minister, supported the Libyan leader. He said European government chiefs would discuss the proposed migration pact at the Tripoli summit.

Frattini went to Libya today to chair a meeting of Mediterranean-rim countries, five from the EU and five in the Maghreb.

"Gaddafi was making an argument all the other Arab leaders in north Africa have made, which is that they don't want to be the gendarmes of Europe," Frattini said. "The issue of the 5 billion [euros] has not been looked at up to now. We will look at it in European meetings and I imagine it will be considered at a European-African summit in Libya in November."

Libya is already taking part in three "pilot projects" set up by the EU and Italy on migration, and Tripoli has received almost €20m in EU funding, the European commission said.

While in Rome Gaddafi advised Europeans to convert to Islam and sought to bolster his claim for billions from Europe by warning that millions of Africans were seeking to migrate to the EU.

"We don't know what will be the reaction of the white and Christian Europeans faced with this influx of starving and ignorant Africans," the Libyan leader told a Rome meeting attended by Silvio Berlusconi, the Italian prime minister. "We don't know if Europe will remain an advanced and united continent or if it will be destroyed, as happened with the barbarian invasions."

Relations between Berlusconi and Gaddafi are strong, based on booming business ties and repression of immigrants. Under a much-criticised deal struck two years ago, Italian border patrols in the Mediterranean are turning back thousands of migrants at sea. They are returned to Libya without being screened for legitimate political asylum cases.

"Europe needs to finally get a migration policy, giving plenty of funds to the migrants' countries of origin and helping transit countries facing a huge burden," Frattini said.

The Rome-Tripoli accord has decreased the numbers of illegal migrants coming into the EU. According to one set of EU figures, the number of illegal immigrants last year fell by more than three quarters to 7,300.

But a confidential internal security report from EU police and border agencies, leaked to the Statewatch whistleblower this week, said 900,000 illegal immigrants were entering the EU every year.

"The risk of illegal migration by north, east and west African nationals to the EU remains high," said the report. "Libya remains a focal point despite recent success in disrupting entry into the EU by this route."