David Cameron has warned European leaders that new proposals designed to keep the UK in the EU are "not good enough".
The Prime Minister said more work was needed as he also cast doubt on the chances of an agreement at a crunch summit next month.
On the table had been an offer of a so-called 'emergency brake', that would allow the UK to prevent EU migrants claiming in-work benefits for four years.
Under the plans, UK officials would decide when to implement the 'brake' as long as they could prove that the UK's welfare system was under extreme pressure.
Downing Street is keen to hammer out a new deal with the EU as soon as possible so it can call its pledged In/ Out referendum for June.
Ministers fear that with the ongoing migrant crisis affecting Europe any delay could increase the chances of an ‘Out’ vote.
After June, September is the most likely date for a vote, to avoid a clash with first the Scottish and then the English, Welsh and Northern Irish school holidays.
The SNP accused the Prime Minister of continuing a pattern of "losing friends and influence" across Europe.
Ukip likened the Tory leader to Oliver and said he was begging for scraps from other countries.
Mr Cameron's warning to the EU followed talks with European Commission president Jean-Claude Juncker and European Parliament president Martin Schulz.
"We want to end the idea of something for nothing - people said that was impossible," the Conservative leader said.
"There is now a proposal on the table, it is not good enough, it needs more work but we are making progress.
"It's not good enough, it needs more work - but it's a start."
He added: "I can’t be certain we’ll get there in February but I will work as hard as I can to deliver a good deal for the British people."
Mr Cameron initially proposed a complete four-year ban on EU migrants claiming in-work benefits.
Eurosceptic Conservatives have heaped pressure on Mr Cameron to get a better deal.
Former Tory leadership candidate John Redwood condemned the four-year ‘brake’ offer as a “sick joke”.
The SNP's Stephen Gethins said: "David Cameron has been doing a fine job of losing friends and influence across Europe throughout his time as Prime Minister - so it's no real surprise that he now finds his demands aren't being met.
"This is a flop of a negotiation that hasn't even got the buy-in of his own Tory Cabinet - let alone the wider country or other EU member states.
"The SNP want to see Scotland remain at the heart of Europe and build our influence to secure beneficial change by working in the spirit of friendship and collaboration with our EU partners."
The Czech Europe minister Tomas Prouza revealed that he had discussed the emergency break with Mr Cameron when the two men met in Prague earlier this month.
Mr Prouza said that he expected the brake to be applied "as soon as the deal is struck".
Other ideas around benefits are also understood to be under discussion.
Jonathan Faull, the Commission official in charge of the renegotiation, said earlier this week that officials were discussing the possibility of varying child benefit payments according to which country he or she was growing up in.
Mr Cameron is due to meet European Council president Donald Tusk for dinner in Downing Street on Sunday.
Meanwhile, the SNP have criticised a competition offering British expats in France the chance to win afternoon tea at a Paris hotel if they vote in the EU referendum.
The party said that the prize highlighted the “absurdity” of the referendum franchise.
Hundreds of thousands of EU nationals living in the UK will not be allowed to vote in the referendum.
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