David Cameron's battle against EU leaders over immigration is not going to be pretty today

Britain's Prime Minister David Cameron is going to have a major showdown with the leaders of every European Union country today as he seeks to get "a better deal" for the UK.

And it isn't going to be pretty.

He is basically pushing the EU to bend major rules - just for the UK - around immigration and welfare for migrants.

While the President of the European Council Donald Tusk has started to be a little more diplomatic and receptive over Cameron's demands, the Prime Minister faces the biggest challenge from German Chancellor Angela Merkel.

In a letter sent by Tusk to the leaders earlier this week, he said that there can be "no taboos" when discussing the "UK issue."

During dinner we will discuss the UK issue, to see if we can pave the way for an agreement in February. As I set out in my letter, we have achieved significant progress in negotiations; however we are still far from an agreement on several topics. This Thursday we will need to focus especially on the most controversial ones. The stakes are so high that we cannot escape a serious debate with no taboos.

The wording of the letter seems to imply that Tusk is at least willing to consider all of Cameron's renegotiation demands, including the most controversial one - restricting the free movement of people and demanding exemptions to social benefits for EU internal migrants for four years.

Cameron outlined his desire to restrict the free movement of EU citizens in a letter he sent to Tusk last month that outlined the changes he would like to make to Britain's relationship with the EU.

Here is the paragraph that is going to cause Cameron the most trouble today.

But we need to go further to reduce the numbers coming here. As I have said previously, we can reduce the flow of people coming from within the EU by reducing the draw that our welfare system can exert across Europe. So we have proposed that people coming to Britain from the EU must live here and contribute for four years before they qualify for in-work benefits or social housing. And that we should end the practice of sending child benefit overseas.

Benefit cuts for migrants is a "red line"

Cutting in-work benefit for EU citizens is seen as controversial by analysts because it goes against a fundamental EU principle that all EU citizens should be treated equally.

Philippe Gudin, an economist at Barclays, wrote in a note this morning that the the welfare exemption for migrants is "a red line for many countries."

"Of course the question of a change to the EU Treaty will have to be considered, and probably rejected, at least for now, by many member states. We should not expect any conclusion today, but the tone of the discussions will probably indicate the extent to which an agreement acceptable by both the UK and the rest of the EU will be possible before February," he added.

Cameron's demands were drawn up in order to achieve two things.

• The first is that they needed to be demands that EU could realistically agree to.
• Secondly, they needed to significant enough for Cameron to be able to campaign for Britain to stay in the EU in the referendum that will be held some time before 2017. That is after all the reason that Cameron is trying to renegotiate Britain's position in the EU.

Cameron was told by the the Commons' European Scrutiny Committee that the public can only trust that his renegotiation demands have been met if there new are treaty amendments or protocols that enshrine them in law.

This means that every single member of the EU needs to agrees to them using their own constitutional procedures. In some countries, this will mean holding a referendum.

Merkel already said in parliament that she would not "call into question the core principles of European integration."

Since sending the letter Cameron has been travelling around Europe trying to convince EU leaders to back his demands and things haven't been going well for him. He faces two major problems.

• The first is that many eastern European countries think that his desire to restrict the benefits given to EU members when they first move to the UK is designed to discriminate against their citizens. There are a lot of Eastern Europeans who move to the UK for economic reasons who could be hit by this change.
• The second problem is that France and Germany are scared that if they give in to Britain's demands, other countries will start making demands of their own.

These fears are summed up by a quote given to the Telegraph newspaper in September by a source close to Emmanuel Macron, the French economy minister.

We need to avoid seeing Cameron declare next year that he got three quarters of what he asked for and then have the next country turning up with a shopping list saying, 'the British got all these concessions, why not us?'

Immigration issues are the linchpin to a Brexit

Back at home, the pressure has been increasing for Cameron to succeed in renegotiating Britain's EU membership.

A poll from ICM this week showed 42% of British voters said they wanted to remain in the EU and 41% said they wanted to leave.

If you excluded the people who don't know, that make it an even 50-50 split between people wanting to leave and people wanting to stay.

However, when the same people were asked how they would vote if David Cameron failed in his attempt to restrict the free movement of people within the EU, 40% said they would vote to remain in the EU and 45% would vote to leave.

If you remove the people who don't know, that works out as 47% who would want to remain and 53% who would want to leave.

With so much at stake, it is surprising how little is known about the people working on Cameron's behalf to secure the renegotiation. Behind the scenes a small group of people almost no one has heard of have been negotiating with diplomats from the EU. They are led by Cameron's chief of staff Ed Llewellyn and Cameron's chief Europe adviser Sir Tom Scholar.

Everything has been done behind closed doors, so we don't really know how successful these negotiators have been, but there are plenty of signs that things have been really difficult.

Not least the fact that the countries Cameron needs to persuade to back him are openly saying they disagree with the renegotiation demands. While standing next to him at a press conference last week, the Polish Prime Minister Beata Szydlo said she and Cameron do not see "eye to eye."

Downing Street told Business Insider that the rumour that Cameron is so frustrated at Llewellyn and Scholar's lack of progress he is now cutting them out of the renegotiations and doing a lot of the work by himself are untrue.

The consensus from all the insiders following the renegotiation can be summed up by a report that was released yesterday by the Centre for European Reform, a pro-EU think tank. They said EU leaders are puzzled about Cameron's demand to restrict in-work benefits for EU citizens and there is no way that Cameron can secure a deal today.

If they are right Cameron will come under increasing pressure from Eurosceptic MPs within his own party to demonstrate that he still has a chance of securing a better deal for Britain in the EU.

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