The German Chancellor Angela Merkel is reported to have made clear she will withdraw her support for Britain’s continued EU membership if David Cameron insists on pushing through curbs on immigration.
Der Spiegel quoted government sources saying Mrs Merkel fears the UK is approaching “the point of no return”.
The Prime Minister wants to renegotiate the terms of Britain’s membership ahead of the Conservatives’ promised referendum by the end of 2017.
He is under pressure to tighten the UK’s immigration controls to counter the growing popularity of UKIP.
Mr Cameron will be aware of the need to calm Tory jitters ahead of this month’s crunch by-election in Rochester and Strood, where the party is desperate to prevent a second seat falling to UKIP.
A Downing Street spokesman said: “The Prime Minister will do what is right for Britain, as he has repeatedly made clear.”
Mr Cameron is unlikely to have welcomed comments by arch pro-European former cabinet minister Ken Clarke, who dismissed UKIP as an “extreme right-wing protest party” and said free movement of labour is “absolutely essential” to the functioning of the single market.
He said: “If you’re going to have a sensible single market, if we want to compete with the Americans and the Chinese and so on and modern world, we need the free movement of labour.”