The European Council President Donald Tusk has given an extra day for negotiations with British diplomats as the three day talks with the Prime Minister David Cameron failed to reach a deal.
Tusk said he would present on Tuesday a "new settlement" proposal to Britain on reforms aimed at keeping the country in the 28-nation bloc.
The two sides began talks in Brussels on Monday morning after a meeting the previous night between Tusk and Cameron ended without an agreement.
A good meeting with @eucopresident, who has agreed to another 24 hours of talks before publishing the draft UK renegotiation text.
— David Cameron (@David_Cameron) January 31, 2016
An agreement was reached on only one of the four policy requests made by Britain, policy would allow the UK to use an "emergency brake" on curbing welfare payments to EU refugees immediately, a spokesperson for Cameron said on Sunday.
"On welfare, the commission have tabled a text making clear that the UK's current circumstances meet the criteria for triggering the emergency brake," the spokesperson said in a statement, calling it "a significant breakthrough."
If the two sides can reach a deal during Monday's talks, then Tusk will present the draft proposal to other EU leaders this week.
EU leaders will have a summit to negotiate the deal in Brussels on February 18-19.
Although the British referendum for leaving the EU is due to take place late 2017, Cameron is expected to have it moved back as early as June this year.
He is keen to reach a deal and hold the vote as soon as possible, before a new flare up in the refugee crisis and before British eurosceptics, particularly in his own party, become even more unruly.