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BRUSSELS (Reuters) - British and EU negotiators agreed much of a reform package on Thursday to help keep Britain in the European Union, leaving Prime Minister David Cameron to settle tricky final issues, notably on migration, at a summit next week, diplomats said.
After talks in Brussels among officials from all 28 member states to review mostly minor amendments to proposals made by European Council President Donald Tusk last week, an EU source reported "good progress" in clarifying technical, legal issues.
"But main political issues are still outstanding and they will have to be dealt with by leaders next week," the source added, referring to a summit on Feb. 18-19 where Cameron hopes to clinch a final deal with his European peers on which he can campaign at home to keep Britain in the bloc at a referendum.
Diplomats said the main outstanding issues were over how long Britain would be able to stretch EU rules by denying equal social benefits to workers from other EU states - an "emergency brake" intended to help Cameron cut immigration - and the wording of pledges to enshrine reforms on euro zone rules and national sovereignty in future treaty amendments.
A British spokeswoman said "we are in a good place" with an amended draft, seen by Reuters. It made concessions to French concerns about British banks gaining advantage in the euro zone and to broader grumbles that doing favours for London will water down other nations' commitments to deeper European integration.
East Europeans felt less satisfied after the talks, saying their demands for tighter limits on plans to curb benefits paid to their citizens working on low wages in Britain were not met, lining up a showdown with Cameron next week on EU migration.
However, there was a consensus among diplomats and officials who spoke to Reuters that, while there was much detailed wrangling still to come, no one seemed willing to derail a deal to help keep the EU's second biggest economy from quitting - or to drag out negotiations to delay the referendum. Many believe Cameron wants the vote in June, requiring a deal by early March.
One diplomat said east European states were pressing their demands on benefits hard: "But we are not ready to die for it."
Cameron, who faces tight opinion polls and a deep split in his own party, made securing reforms a condition for campaigning to keep Britain in the EU. Eurosceptics mock the changes as trivial - a view shared privately by many EU diplomats who are however anxious to help the prime minister win his case at home for fear Britain's departure could start unravelling the bloc.
The most contentious element gives Britain the "emergency brake" to protect its welfare system from a threat by denying non-British workers equal benefits for up to four years after they arrive from other parts of Europe to take up jobs.
Poland, Hungary, Slovakia and the Czech Republic, known as the Visegrad Group, have pushed to limit the total duration of that emergency period to four years. The current EU text leaves the limit blank for the leaders to determine at their summit.
British officials suggest the brake should be able to be applied for at least seven years. Britain allowed Poles and others to come to work in Britain as soon as their ex-communist countries joined the EU in 2004 - unlike most other states which used an EU rule to bar them from jobs for seven years.
Tusk, who on Wednesday warned that the negotiating process was "very fragile", travels to Prague and Bucharest on Monday and Tuesday to try and shore up political support for the deal ahead of the summit. He will also be in Paris and Berlin.
The revised text incorporates language on Britain's rights in respect of the euro zone and euro zone banking rules to assuage French concerns that the original proposal might give a competitive advantage to London's financial institutions.
Also amended was language to appeal to European federalists, underlining that many Europeans support further political integration despite British concerns to shield themselves from that. It highlighted, too, that unlike Britain most non-euro states are obliged at some point to adopt the currency.
Writing by Alastair Macdonald; Editing by Andrew Heavens