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As part of his promised renegotiation of Britain's relationship with Brussels, the Prime Minister had told European Council president Donald Tusk he wanted EU workers in the UK to be banned from claiming in-work benefits or social housing for four years.

But Mr Cameron is likely to drop the key part of his renegotiation amid hostility from EU officials, it is reported.

A European diplomat close to the negotiations told The Times that British officials have begun drafting new plans in the face of opposition to the proposed four-year ban.

They added: "The institutions are expecting David Cameron to come with new proposals to the European Council next month.

"There are possibilities to help but not on the specific point of four years.

"We understand that UK officials are working on something else."