After European Union deal, Cameron faces harder battle

Cameron, 49, now finds himself fighting a referendum which will determine Britain's future in world affairs and shape the future EU Britain is the bloc's second-largest economy and one of its two main military powers

London : When Prime Minister David Cameron sealed a deal designed to keep Britain in the European Union after two days of talks in Brussels, his relief was short-lived. Within hours of Friday's agreement, one of Cameron's closest allies, Justice Secretary Michael Gove, and five other ministers declared they would campaign against him in a June 23 referendum on whether Britain should stay in the bloc.

It was the first blow in what could be a new "civil war" in Cameron's Conservative Party over Europe. Divisions over Britain's place in Europe contributed to the downfall of two of his predecessors, John Major and Margaret Thatcher. It is a war Cameron tried hard to avoid when he came to power in 2010.

The following year he ordered his party in the strictest terms to vote down a bill suggesting a referendum on membership of the EU, saying it was the "wrong answer for Britain". But within two years, he had changed his mind, paving the way to a membership referendum, by declaring: "I believe in confronting this issue - shaping it, leading the debate. Not simply hoping a difficult situation will go away."

Cameron, 49, now finds himself fighting a referendum which will determine Britain's future in world affairs and shape the future EU - Britain is the bloc's second-largest economy and one of its two main military powers. In a quirk of the British political system, the Prime Minister is in the unusual position of being more sure of the backing of the opposition Labour Party than of his own party.

The focus on a specific, and otherwise little-known, element of Britain's welfare system maddened some EU officials, who saw it as a direct attack on the EU's fundamental principles and discriminatory. It almost derailed the negotiations. Cameron aides say the prime minister has plenty of experience of EU affairs, visiting 20 member states for talks on the bloc since he was re-elected last year.

Cameron was forced to focus on in-work benefits after concerns over immigration grew among voters over an influx of migrants from eastern European member states. His move was also partly meant to counter a growth in the popularity of UKIP. In 2014, he said he would "not take no for an answer and when it comes to free movement I will get what Britain needs".

But EU officials swiftly made clear they would not allow this, saying it would undermine one of the EU's founding principles. Struggling to find a way to include immigration in the renegotiation, Cameron's eye fell on a report by the Open Europe think tank which suggested that curbing the benefits to EU workers would reduce migration and would avoid troublesome change to the bloc's founding treaties.

Cameron's officials say the prime minister has formed policy in response to public concerns over high immigration. Although agreement was reached on Friday, the decision to include gestures for Britain on welfare reform still rankles in EU capitals. One diplomat involved in the talks said Britain's EU partners were "rather irritated ... that here we are dealing with some rather obscure issues... while we have ... major issues we should really be on instead of this".

For eurosceptics, the curbs on in-work benefits and restrictions to payments to EU migrants with an annual income below a certain level for their children who remain abroad do not go far enough and accuse Cameron of buckling under pressure from the EU. "Britain banged the table and aggressively demanded the status quo," Daniel Hannan, a Conservative member of the European Parliament, wrote on Twitter.

"The EU, after some mandatory faux-agonising, agreed." "He's tinkering because he knows he cannot question one of the founding principles of the EU which is freedom of movement," said Baron. Baron said the result of the referendum would be close and "lance the boil" in the party for good. But others disagree, seeing little chance of 'the Europe issue' ever going away something that may come to hurt Cameron whichever way Britain votes.

"The European issue has split it from top to bottom, ever since we went in," said Jeffrey Archer, a former conservative lawmaker and an author. "It's a divisive issue and if we do come out, it will be divisive. If we do stay in, it will be divisive."

Why is a referendum being held?

Britain had a referendum in 1975 shortly after it had joined the EU, or the Common Market as it was then called. The country voted to stay in then but there have been growing calls, from the public and politicians, for another vote because, they argue, the EU has changed a lot over the past 40 years, with many more countries joining and the organisation extending its control over more aspects of daily lives. David Cameron initially resisted these calls but in 2013 he changed his mind.

The EU agreement, which will take effect immediately if the UK votes to remain in the EU on June 23, includes changes to:

• Child benefit - Child benefit payments to migrant workers for children living overseas to be recalculated to reflect the cost of living in their home countries
• Migrant welfare payments - The UK can decide to limit in-work benefits for EU migrants during their first four years in the UK… in the event of "exceptional" levels of migration, but must be released within seven years - without exception.
• Eurozone - Britain can keep the pound while being in Europe, and its business trade with the bloc, without fear of discrimination. Any British money spent on bailing out eurozone nations will be reimbursed.
• Protection for the City of London - Safeguards for Britain's large financial services industry to prevent eurozone regulations being imposed on it
• Sovereignty - There is an explicit commitment that the UK will not be part of an "ever closer union" with other EU member states. This will be incorporated in an EU treaty change.
• 'Red card' for national parliaments - It will be easier for governments to band together to block unwanted legislation. If 55% of national EU parliaments object to a piece of EU legislation it may be rethought.
• Competitiveness - The settlement calls on all EU institutions and member states to "make all efforts to fully implement and strengthen the internal market" and to take "concrete steps towards better regulation", including by cutting red tape.
• Some limits on free movement - Denying automatic free movement rights to nationals of a country outside the EU who marry an EU national, as part of measures to tackle "sham" marriages. There are also new powers to exclude people believed to be a security risk - even if they have no previous convictions. (Courtesy: BBC)

By Elizabeth Piper