Plans by David Cameron to get more control over how many EU migrants can enter the UK look set to be blocked by the leader of the German government Angela Merkel.
The German Chancellor said she is against changing one of the fundamental principles on which the European Union is built - freedom of movement.
British Prime Minister Mr Cameron has staked his political future on being able to renegotiate changes that will allow the UK greater control over its borders.
But Mrs Merkel has now signalled she will not support the move, which could make Mr Cameron's aim much more difficult to achieve.
Speaking to the Sunday Times, the German Chancellor said: "Germany will not tamper with the fundamental principles of free movement in the EU."
The British Prime Minister has previously indicated he will make reforms to the principle of freedom of movement for workers within the union a "red line".
He has promised that if he wins the next general election he will force through a number of changes to the way the EU works and then hold a referendum on Britain's membership.
He is thought to be preparing a manifesto pledge to bring in quotas for low-skilled migrants from the EU.
At present, it is a condition of the EU that member states must allow workers from other EU country to live or work there.
Before the last general election Mr Cameron promised to bring net annual immigration down to the "tens of thousands".
He has failed to get anywhere near the target, with many of those arriving annually coming from EU states to find work.
Mr Cameron has had a difficult few days, with European issues high on the agenda as he tries to fight off a UKIP challenge in the Rochester and Strood by-election.
On Friday he attended a Brussels summit only to be told he had to pay an extra £1.7bn into EU coffers.
Mr Cameron said he would not pay the bill by the 1 December deadline and warned that the row risked pushing the UK closer to the leaving.
The European Commission dismissed any objections, saying the figure was calculated by independent statisticians using a standard formula agreed by all member states.
That process depended on the relative economic performance of each state.
Mr Cameron's difficult few days, and those suffered by Labour leader Ed Miliband, appear to be reflected in the latest opinion polls.
A YouGov poll for the Sunday Times finds the Conservatives and Labour neck-and-neck on 33%, UKIP on 16% and the Lib Dems on 7%.
An Opinium survey for the Observer also puts the Tories and Labour on 33%, with UKIP on 18% and the Liberal Democrats on 6%.
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