- Updated - Crunch talks about a deal to keep Britain in the EU will continue this morning after marathon negotiations last night yielded little progress.
David Cameron and most EU leaders in Brussels continued talks till 5am and will return to negotiations this morning. However, what was initially termed an 'English breakfast' will now be a working lunch.
Mr Cameron made no comment as he left at 5.30am.
Maltese Prime Minister Joseph Muscat said earlier that although little progress had been made, he was still optimistic that a deal would be struck.
He pointed out that some countries that are now accusing the UK of lacking solidarity when it proposed benefit curbs for EU migrants are contradicting themselves, since they had rejected burden sharing proposals,
The Prime Minister did not identify the countries but the statement was a clear reference to some countries in Eastern Europe like Hungary that have taken hard-line stands on Syrian refugees heading to Europe.
Dr Muscat reiterated his optimism that a deal to prevent a 'Brexit' was possible despite the differences. “There is wide convergence,” he said.
Malta has described British requests as reasonable, but it is insisting that any changes must apply to all EU countries and there must be an even playing field and not different rules for those that are in the eurozone and those who are out, particularly with regard to the regulation of financial institutions.
The draft deal included both these requirements, Dr Muscat said.
British Prime Minister David Cameron wants a deal he can sell to the British public that will be called to vote in an in-out referendum.
STUBBORN DIFFERENCES
The proposed benefits ban is intended to curb EU migrants, mostly from Eastern Europe, traveling to Britain for work. Mr Cameron has demanded an emergency break to suspend benefits for seven years, extendable by two three-year terms.
This is being opposed by Poland, Hungary, and two other countries.
Dr Muscat said he was confident a compromise could be reached on the basis of the draft text, which reportedly spoke of a four-year curb
Malta is insisting that any deal must not be UK-specific but applicable to any country that could require it in the future, Dr Muscat said, adding this was reflected in the draft text.
Paris has pushed for amendments to ensure Britain cannot veto actions by the euro zone countries or give City of London banks competitive advantage through regulation.
The wish is there to keep Britain as a member of the European Union ... It became clear that agreement will not be easy for many, but that the will is there- Merkel
And Belgian Prime Minister Charles Michel is fighting a rearguard action for the federalist cause to limit damage done to European plans for "ever closer union" by giving eurosceptic Britain a guarantee it need never share more sovereignty.
Italian Prime Minister Matteo Renzi said there had been some backward steps after an round-table session to discuss London's demands of reform in the EU before dinner: "I'm always confident but a bit less optimistic than when I arrived," he said.
German Chancellor Angela Merkel said: "The wish is there to keep Britain as a member of the European Union ... It became clear that agreement will not be easy for many, but that the will is there."
Many leaders said they felt they were at a historic turning point for European integration. No country has ever voted to leave the Union, and a British exit could deal a blow to the UK economy and certainly damage the EU's standing and self confidence.
How far the reform package will sway voters either way is unclear. Cameron's left-wing Labour opponent, Jeremy Corbyn, was also in Brussels where he echoed Conservative eurosceptics in describing the likely immigration deal as a "theatrical sideshow". But Labour plans to campaign to remain in the bloc.