epa05171112 British Prime Minister David Cameron (C) attend a heads of state dinner on the second day of an extraordinary two-day EU summit at EU headquarters in Brussels, Belgium, 19 February 2016. EU leaders were set to try to thrash out an agreement with Britain on reforms, amid hopes that they can seal a deal which will convince the country to stay in their bloc. Fears are rife that Britons might vote to leave the European Union in a referendum that Prime Minister David Cameron has promised to hold by the end of 2017, but that is widely expected this year already. The turmoil over Brexit - the buzzword for Britain's possible departure from the EU after more than 40 years of half-hearted membership - comes at a time when the bloc is already struggling with a severe migration crisis and enduring economic woes. EPA/OLIVIER HOSLET / POOL
David Cameron, jacketless, at dinner with other EU leaders on Friday evening © EPA

David Cameron’s summit battle for a “new settlement” for Britain in the EU has stretched into Friday night, forcing the prime minister to postpone an expected cabinet meeting to launch a June referendum.

With France and Poland still digging in over financial regulation and migrant benefit reforms, diplomats were looking at a potentially long evening of tense negotiations to finalise the details of the package.

Although no one single issue is big enough to completely derail the talks, Mr Cameron, France’s François Hollande and Poland’s Beata Szydło put up unexpected resistence to various compromise proposals.

“Negotiations are continuing into this evening,” Mr Cameron tweeted after another deadline for a deal was missed. “A Cabinet meeting won’t be possible tonight. One will be held if and when a deal is done.”

Dalia Grubskyaite, the Lithuanian prime minister, said: “No matter what we do here, no matter what face-lifting or face-saving we perform here, it is up to the British people to decide”.

Mr Hollande said he was still not prepared to sign a deal that would give David Cameron his long-sought renegotiated relationship with the EU, saying leaders “still have work to do” despite all-night talks aimed at striking a compromise.

The French president said compromises aimed at resolving Paris’s concerns that the accord could still enable the City of London evade some EU financial rules.

Mr Hollande insisted that France was determined “to make sure financial regulation applied everywhere in Europe, without vetoes or impediments”. Europe, he added, must “fight against speculation and financial crises everywhere using the same institutions”.

The comments from Mr Hollande underlined the work that still needed to be done for Mr Cameron to strike his proposed EU deal, with the UK prime minister warning that he could walk away if he failed to get what he wanted.

Mr Cameron’s insistence that the “emergency brake” for controlling welfare payments should be applicable for a long period — the prime minister suggested a maximum of 13 years — remains a sticking point, as do planned curbs to the payment of child benefit to migrant workers whose children live in their home country.

As the negotiations continued, the fight over the EU’s failing migration policy began bleeding into the UK debate. According to officials briefed on the Greek position, Alexis Tsipras, the Greek prime minister, is threatening to veto a UK deal unless all EU leaders commit to keeping borders open until a March 6 emergency summit with Turkey.

The Greek concerns were sparked by Austria’s move to limit asylum applications to 80 per day, leading to fears that a domino effect could result that would further block all refugees from moving north from Greece.

The protracted talks in Brussels scuppered the prime minister’s hopes of returning to London to sell the deal to his cabinet and then to announce the date of a referendum on Britain’s membership of the EU, expected to be set for June 23.

Mr Cameron is resigned to losing one of his key allies, Michael Gove, to the Out camp, whatever the deal, while the chances of support from Boris Johnson, London mayor, are deemed to be no better than 50/50.

Meanwhile Downing Street has been lining up business leaders to come out in support of his EU deal next week, even before any agreement has been reached.

A letter from supportive business leaders is planned for next week, with the Daily Telegraph claiming that, ultimately, 80 out of Britain’s FTSE 100 companies would back Britain staying in the EU.

However, that number was seen as speculative by some in the Remain camp and research by the Financial Times this month revealed that some top companies were reluctant to get drawn into the debate.

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