Prime Minister David Cameron could campaign for Britain to leave the European Union if it stops him restricting EU migrants' access to his country's welfare system, he hinted on Friday, but said he was confident it wouldn't come to that.
In a speech designed to breathe new life into his campaign to be re-elected in May, Cameron set out a blueprint for restricting EU migrants' access to welfare benefits but stopped short of proposing quotas on numbers or demanding Britain be allowed to halt inflows if it felt too many people were coming.
Cameron's aides have floated such ideas in the press in recent months, but have seen them decisively shot down by German Chancellor Angela Merkel who has made clear she won't allow the EU's freedom of movement of worker rules to be diluted.
Instead, he said he wanted employed EU migrants to wait four years before being allowed to access welfare benefits, and for unemployed EU migrants not to be eligible for any help.
Cameron said his plans would need EU treaty change, a step other EU leaders have baulked at, but it wasn't immediately clear why treaty change would be needed. The speech drew a distinctly calm reaction from EU powers who were relieved Britain had shelved plans to tinker with freedom of movement.
With polls showing immigration is voters' top concern, Cameron is under pressure to get tough on the issue. Many of his Conservative lawmakers fear the rise in popularity of the anti-EU UK Independence Party (UKIP), which this month won its second seat in parliament, threatens their re-election chances.
If re-elected, Cameron has promised to renegotiate Britain's ties with the EU before holding a membership referendum in 2017. While making it clear he thought that renegotiation would succeed, he dropped his strongest hint yet that he may campaign for Britain to quit the bloc if he fails.
"I will negotiate a cut to EU migration and make welfare reform an absolute requirement in renegotiation," Cameron, speaking at a factory in central England, said.
"If I succeed in the negotiation that I am going to undertake, I will, as I have said, campaign to keep this country in a reformed EU. (But) if our concerns fall on deaf ears and we cannot put our relationship with the EU on a better footing, then of course I rule nothing out."
Cameron hopes his speech will appease some of his more right-wing lawmakers and woo disgruntled voters who have switched their allegiance to UKIP, which wants to sharply curb immigration and leave the EU.
It is unlikely to fully achieve either objective.
The speech was a delicate balancing act: He had to please a domestic audience while trying not to offend EU allies.
"DISCUSS WITHOUT DRAMA"
In Brussels, a European Commission spokesman reacted in low-key fashion. "These are UK ideas and they are part of the debate. They will have to be discussed without drama and should be discussed calmly and carefully. It is up to national lawmakers to fight against abuses of the system and EU law allows for this."
Seeking to allay anxiety among EU allies, Cameron spoke to Merkel, European Commission President Jean-Claude Juncker and Polish Prime Minister Ewa Kopacz before the speech.
A spokesman for Merkel said Germany had always emphasised the importance of the principle of freedom of movement and had noticed Cameron had not called it into question.
"It is important that Prime Minister Cameron, in his speech, recognised this central column of the European Union and the common internal market," the spokesman said.
"The German government is ready to work closely with Britain and other partners on the issues raised by prime minister Cameron in an attempt to find acceptable solutions."
Cameron took special care to reassure the Polish that the measures would not discriminate against Poles. Britain was home to around 726,000 Poles in 2013, official data shows, making them the most common non-British nationality.
Polish foreign ministry spokesman Marcin Wojciechowski said: "We have nothing against tightening the benefits system, but it has to be done in accordance with the EU regulations."
But in Sofia, Bulgaria, some residents were sceptical.
"It's discriminatory," said French teacher Ivan Lyubenov. "Cameron is trying to pander to the Eurosceptic people."
If implemented, Cameron's proposals would affect over 400,000 EU migrants, many of them working in low-wage jobs.
Welfare payments to EU migrants' children living outside Britain would be stopped, and jobless EU migrants would be removed if they were unable to find work within six months.
Nationals from member states joining the EU in future would also be banned from joining the labour market until their home economies had converged more closely with current members.
Such changes would require the agreement of other EU states.
Europe's top court ruled earlier this month that EU nations could block jobless immigrants from receiving welfare benefits, giving Cameron some leeway to act.
Under the EU's freedom of movement rules, EU citizens are entitled to work anywhere in the bloc. That has seen hundreds of thousands of EU nationals come to work in Britain, which has the bloc's fastest-growing economy.
Cameron has come under fire for failing to deliver a 2010 promise of cut net migration to the "tens of thousands". Figures published on Thursday showed it surged more than 40 percent to 260,000 in the year to June.
UKIP and parts of the Conservative party say the public is unhappy about what it perceives to be abuse of the welfare system by unemployed EU migrants and is worried that those migrants who do find jobs are depressing wages.
Cameron hopes the speech will draw a line under the issue and allow him to refocus debate on the economy, which has staged a strong recovery on his watch.
Nigel Farage, UKIP's leader, said of the speech: "I don't think a single person in Britain has bought into any part of what he has said today."