David Cameron has warned that the "future" of Britain in the European Union is at stake as he announced an emergency fund to help communities struggling to cope with an influx of foreign migrants.

In a major speech in which he set out ambitious plans to overhaul the benefits system to reduce the number of migrants coming to the UK, he warned that the issue will determine "our future in the European Union".

He announced plans for a new fund to "to help meet the additional demands on local services" in communities across the country that are struggling to cope with large numbers of foreigners.

And in a clear challenge to his European counterparts to accept his reforms, he said that he will not accept "defeatist" and insisted that Brussels must start talking about immigration "properly".

"A conversation cannot begin with the word 'no'," he said. "The entire European Union is built on a gift for compromise, for finding ways round difficult corners, for accepting that sometimes we have to avoid making the perfect the enemy of the good."

The Prime Minister also said that Britain must have the right to make European migrants wait four years before receiving welfare or council houses.

And he said that he wants to ban foreign jobseekers claiming benefits and deport them from the UK if they do not find work within six months.

Foreigners will also be banned from sending millions of pounds worth of child benefit payments and tax credits abroad if they do not bring their children with them to the UK, Mr Cameron said.

The Prime Minister set out a number of "red lines" for his forthcoming renegotiation with Brussels, which he said will require EU treaties to be changed.

His announcement of financial assistance for local communities with large migrant populations will be seen as an attempt to counteract the threat of Ukip.

Ukip now has a stronghold in many constituencies with large numbers of foreigners and the party is hoping to win a number of seats from the Conservatives at the general election.

Mr Cameron said: "We will continue with our welfare and education reforms making sure that it always pays to work, training more British workers right across the country, but especially in local areas that are heavily reliant on migrant labour and supporting those communities with a new fund to help meet the additional demands on local services."

Mr Cameron said that his reforms will be a "return to rules" put in place by Margaret Thatcher in the 1980s that were subsequently overturned by the European Court.

It would "deliver the toughest system on welfare for EU migrants anywhere in Europe", he said.

The proposals are an "absolute requirement in the renegotiation" with Brussels, Mr Cameron said, warning that if they are not accepted, Britain could leave the EU.

However, he is sure to face criticism that his proposals do not go far enough as they do not include plans to tear up the freedom of movement rules, which currently allow an unlimited number of EU citizens to live and work in the UK.

Cabinet ministers had been urging him to announce plans for annual quotas of migrants or an "emergency brake" system allowing Britain to close its borders if there is a spike in foreigners coming here from a particular country.

Mr Cameron said: "Some of the most ardent supporters of the European Union will say it is impossible - fearing that if an accommodation is made for Britain, the whole European Union will unravel.

"And those who passionately want Britain to leave the European Union will say it is impossible - and that the only way to control migration into the UK is to leave the EU. On this, at least, they will agree.

"To those who claim change is impossible, I respond with one word, the most powerful word in the English language. Why? Why is it impossible?

"Why is it impossible to find a way forward on this issue, and on other issues, that meet the real concerns of a major Member State, one of the biggest net contributors to the EU budget? I simply don't accept such defeatism."

Mr Cameron added: "So I say to our friends in Europe. It's time we talked about this properly.

And a conversation cannot begin with the word 'no'. The entire European Union is built on a gift for compromise, for finding ways round difficult corners, for accepting that sometimes we have to avoid making the perfect the enemy of the good.

"I do not pretend this will be easy. It won't. It will require a lot of hard pounding, a lot of hard negotiation."

Downing Street hopes that the speech will "draw a line" under the immigration issue and allow Mr Cameron to relentlessly focus on the economy in the six months before the election.

Mr Cameron's plan to end access for European migrants to tax credits, housing benefits and social housing for four years is designed to dramatically reduce the "pull factors" that encourage foreigners to come to the UK.

Banning new arrivals from claiming in-work benefits would mean many EU migrants on low-paid jobs would be worse off in Britain than if they remained at home.

As part of the plans, EU migrants will not be able to claim out-of-work benefits under the Universal Credit system and will be removed from the UK if they do not find a job within six months.

The Conservatives also want to abolish the current system whereby EU migrants can bring family members from outside the bloc to the UK without any restrictions.

Mr Cameron also wants "tougher and longer" re-entry bans for foreign rough sleepers, beggars and fraudsters and he wants stronger measures in place to allow EU criminals to be deported.

Crucially, the Prime Minister will also tell Brussels that he wants to prevent new member states from being given the same freedom of movement rights until their GDP reaches a certain level.

This would prevent floods of migrants leaving the home country in order to take advantage of Britain's economic success, Downing Street believes.

Albania, Turkey and Bosnia-Herzegovina are all currently attempting to join the EU.

Mr Cameron said: "Here is an issue which matters to the British people, and to our future in the European Union.

"The British people will not understand – frankly I will not understand - if a sensible way through cannot be found, which will help settle this country's place in the EU once and for all.

"And to the British people I say this. I share your concern, and I am acting on it. I know how much this matters."

He added: "I do not pretend this will be easy. It won't. It will require a lot of hard pounding, a lot of hard negotiation. But it will be worth it.

"Because those who promise you simple solutions are betraying you. Those who say we would certainly be better off outside the EU only ever tell you part of the story.

"Of course we would survive, there is no doubt about that. But we would need to weigh in the balance the loss of our instant access to the single market, and our right to take the decisions that regulate it.

"And we would of course lose the automatic right for the 1.3 million British citizens who today are living and working elsewhere in Europe to do so.

"That is something we would want to think carefully about giving up."

Source : The Telegraph