The European Union warned the UK that any breakthrough in talks on a better membership deal would have to be hard-won after senior officials were given an extra 24 hours to iron out differences.

Prime Minister David Cameron and European Council President Donald Tusk left a dinner yesterday saying they had failed to reach a deal, and the two sides were sombre in their assessments of how the negotiation stood today.

Eurosceptic British lawmakers said the divergence was being played up to make an eventual agreement seem like a triumph, but EU officials poured some cold water on what Britain had called a "significant breakthrough" on measures to curb immigration.

"It's difficult," said a source close to the negotiations. "The talks are going on non-stop, both negotiating teams are already in Brussels for further talks."

The two sides have indicated they want a deal agreed by EU leaders at their Brussels summit in mid-February, enabling Cameron to call a referendum on EU membership as early as June.

Cameron's spokeswoman told reporters: "There is more work to do in all four areas, more work in some areas than in others."

It is not enough for the Commission and Council lawyers to agree; this is a process that is run 'at 28'

But she said a "significant" agreement had been reached with the European Commission, the EU executive, allowing Britain to suspend some payments to migrants from the bloc for four years immediately after the referendum.

That would go some way to appeasing critics of EU membership in Cameron's party, but a spokesman for the Commission warned it would need to be agreed by the leaders of all 28 countries.

"It is not enough for the Commission and Council lawyers to agree; this is a process that is run 'at 28', and the Commission works for all 28 member states of the union," said Margaritis Schinas.

HIGH STAKES

Cameron has demanded reform in three other areas. He wants Britain excluded from the EU goal of "ever closer union" and protected against moves by the 19 countries that share the euro currency to impose rules by majority vote on London. He also seeks to empower groups of national parliaments to block EU legislation.

The stakes are high. The referendum will not only determine Britain's future role in world trade and affairs, but also shape the European Union, which has struggled to maintain unity over migration and financial crises, by ripping away its second-largest economy and one of its two main military powers.

Some Eurosceptics have branded the negotiation a waste of time.

"Don't be fooled, again, by Cameron's ongoing charade," Paul Nuttall, deputy leader of the UK Independence Party, said in a statement, predicting the prime minister would return in 24 hours with a "deal".

But there are plenty of areas where EU countries have concerns about Britain's demands and, if and when agreement is found, there will still be tussles over some details.

Still up for grabs is how long the so-called 'emergency brake' on welfare payments to migrants will be in force, how many countries would have to agree in order to to block EU legislation, and how to enforce protection for London's finacial industry, among others.

Officials say they hope that a draft package will be circulated to capitals by Tusk on Tuesday.