According to the German news magazine Der Spiegel, sources in the chancellor's office and the German foreign ministry said that Merkel considers any changes to the freedom of movement rules as leading the
In question is Cameron's proposal to put a cap on low-skilled migrants from the rest of the EU, which comes largely under pressure from the anti-European UK Independence Party (UKIP).
The immigration restriction violates the basic principle that allows members of the EU to live and work in an EU state, Merkel has reportedly argued.
The Guardian quotes the senior Tory MP Ken Clarke as saying on the BBC's Sunday Politics: "Not only is that one of the principles of the EU, it's the basis of any serious single market. The Norwegians, who eurosceptics admire, they accept the free movement of labour. They've got a bigger proportion of other EU nationals in their country compared with their own nationals than we have.
A Downing Street official would not confirm or deny Der Spiegel's report said: "The prime minister will do what is right for Britain as he has repeatedly made clear."
According to the Financial Times, a spokesman for Merkel said: "Everything there is to be said on the part of the federal government, on the question of immigration, has been said by the chancellor at her press conference in Brussels."