David Cameron has called on European leaders to cut red tape for British businesses as he prepares for a showdown on the issue next week.

The Prime Minister has also come out fighting in his government's row with the European Union over claims of "benefits tourism" by EU migrants.

Mr Cameron is due to meet with other European leaders at a European Council meeting next week.

Last night he sent them a copy of a report compiled by UK business leaders, including the chief executive of Marks & Spencer, detailing how 30 reforms to EU bureaucracy could help British firms.

Mr Cameron said: "All too often EU rules are a handicap for firms, hampering their efforts to succeed in the global race.

"Business people, particularly owners of small firms, are forced to spend too much time complying with pointless, burdensome and costly regulations and that means less time developing a new product, winning contracts or hiring young recruits. I'm determined to change that and to get the EU working for business, not against it."

The report suggests scrapping the rule that small businesses in low-risk sectors must keep written health and safety risk assessments. It says this move alone could help an estimated 220,000 small UK businesses and an estimated €2.7 billion (£2.3bn) across the EU. The group also wants European politicians to be forced to reject all proposed legislation that is not "pro-growth".

Earlier Downing Street hit back after a European Commission report said benefits tourism was "neither widespread nor systematic". The document found the number of unemployed EU migrants in the UK had risen from 432,000 in 2006 to 612,000 last year.

But it said migrants from the eastern European states that joined the EU in 2004 had made a "positive" contribution to the UK's finances, paying 37% more in taxes than they received in services and benefits.

UK ministers are in dispute with the EC over their refusal to change laws that would allow immigrants access to some benefits more quickly.

But the Prime Minister's official spokesman said there was "widespread and understandable concern" that benefits were among the "pull factors" that persuade migrants to come to the UK.