The U.K. government has said the "Prime Minister will do what is right for Britain" in response to reports that Germany’s Chancellor Angela Merkel said she would rather see the UK leave the EU than compromise over the bloc's principle on the free movement of people.
The comments came on Monday after German magazine Der Spiegel reported that sources in Berlin had said Britain was nearing the "point of no return" and Germany viewed British calls for curbs on the free movement of people as a "red line".
A Downing street spokesperson told the Anadolu Agency: "Cameron thinks limiting migration is a key principle for Britain to remain in the EU."
Cameron's Conservative party has been under pressure from the anti-EU and anti-immigration UK Independence Party (UKIP) over the past year as public sentiment has hardened towards immigrants amid harsh "austerity measures" imposed by the government.
The conservatives have lost many votes to the party, according to opinion polls, and two Conservative MPs have defected to it.
Cameron has responded by taking a stronger line on the EU and immigration to address the growing concerns of his party members, and said he would give a speech on immigration before Christmas.
UK 'must clarify role'
In Germany, government spokesman Steffen Seibert did not refute Der Spiegel's story during Monday’s regular press conference at the Federal Press Service and said Germany’s position on the UK’s future in the EU had not changed.
He said: "It is first of all a matter for the UK to clarify itself what role it wants to play in future within the EU."
Seibert said the matter was not a bilateral issue between London and Berlin, but one between the UK and all its EU partners.
He underlined that freedom of movement within the EU was a non-negotiable principle for the German government.
He acknowledged the difficulties faced by several European countries including the UK as well as Germany due to the growing number of immigrants coming from new member states to benefit from social security systems.
“Combatting the misuse of freedom of movement is a legitimate interest. We also share this. But the general principle of freedom of movement should not be called into question,” Seibert stressed.
'Calm and rational'
The UK’s chancellor, George Osborne said he was not worried about the German Chancellor’s reported remarks.
"I think it’s a little bit thin" he told the BBC, referring to the Der Spiegel report and added that he felt Germany understood the British public's concerns over EU migrants and welfare benefits.
"The British public want this addressed. We are going to do this in a calm, rational way," he said.
Douglas Carswell sparked a by-election when he switched from the Conservative Party to UKIP in August and stood down from his parliamentary seat in Clacton, Essex.
He retook the constituency for UKIP with a 12,404 majority.
Mark Reckless, the Conservative MP for Rochester and Strood, announced weeks later that he was also defecting to UKIP, triggering another by-election to be held later this month.
European Commission President Jose Manuel Barroso warned in October that Britain would be making a "historic mistake" if it decided to curb freedom of movement or leave the European Union.
The outgoing EC President said: "In the years to come the UK could be facing a choice – to stay or leave the European Union."
A Downing Street source rejected Barroso’s warnings and said that the "status quo was not acceptable" to the U.K.
By Assed Baig
*Ayhan Simsek contributed to this report from Berlin.Anadolu Agency website contains only a portion of the news stories offered to subscribers in the AA News Broadcasting System (HAS), and in summarized form. Please contact us for subscription options.