David Cameron admits: I will miss my target of EU deal this month

PM had hoped to secure a final deal on a reformed relationship with the EU at a summit of leaders later in December but the delay means the date of the referendum will be pushed back too

David Cameron will now hope to secure an agreement in February (AFP)

David Cameron has given up hope of securing a deal on his EU renegotiation before the end of the year, Downing Street has admitted.

The Prime Minister was hoping to finalise his reform plans at a summit of EU leaders on December 17 but Number 10 said that “difficult issues” remain unresolved following a phone call between him and German Chancellor Angela Merkel on Thursday.

It means the EU referendum will be pushed back too, with a vote before next autumn very unlikely as the Prime Minister must give four months' notice and will not set a date before securing a deal with EU leaders.

The major stumbling block is Mr Cameron’s demands to bar EU migrants from access to in-work benefits for four years, a proposal that has faced firm opposition from Eastern European leaders.

Last month the EU President Donald Tusk warned that it would be "very tough" to secure a deal in December.

He will now hope to secure an agreement with his European counterparts at the next summit in February.

Downing Street said the delay demonstrated "the scale of what we are asking for" and said the European Council meeting in Brussels this month will now involve a “substantive discussion of the proposed changes in each area".

Explaining the content of Mr Cameron's conversation with Ms Merkel earlier on Thursday, a Downing Street spokesperson said: "The Prime Minister explained that his priority is to get the substance right, underlining the need for legally binding, irreversible changes.

"Instead, we should keep up the pace of discussions and use the summit for a substantive discussion of the proposed changes in each area. Chancellor Merkel agreed with this approach, emphasising her commitment to finding solutions that will address the concerns of the British people."

Mr Cameron unveiled his four demands for reform in a speech last month. They are: securing safeguards for non-euro countries, cutting red tape, exempting Britain from the EU treaty commitment to "ever-closer union" and restricting EU migrants' access to in-work benefits such as working tax credits, child tax credits and social housing until they had lived in the UK for at least four years.

But immediately after he finished laying out his demands the EU Commission said his plans to set limits on migrants' benefits was "highly problematic".