European Parliament President Martin Schulz urged Britain to choose compromise over confrontation on Thursday 18 June, as Prime Minister David Cameron tries to renegotiate UK's ties with the EU before holding an in-out membership referendum by the end of 2017.

"We started the exchanges of views, and my feeling is there's the possibility to come to common conclusion, how we can make the European Union more transparent, more effective, how to deepen the single market. We discussed the digital single market as a common goal, necessary reform steps of the European Union, this is a common interest. And if it go in that direction we'll find a solution," said Schulz after holding talks with Cameron in London.

"If this is a confrontation to insist treaty change at whatever the cost to win the referendum, it must be you have to give us what we want and then we'll consider if we'll stay in, then we'll not fudge. Therefore it was an open-minded exchange of views. My feeling is that prime minister Cameron knows very well that in Europe, the solution comes from compromise."

Cameron has touted his ideas in meetings with more than 20 EU counterparts so far and is due to formally present his reform plans to EU leaders in Brussels later in June. The PM says he is confident of securing concessions and wants Britain to remain in a reformed EU. He has also made restricting EU migrants' access to British welfare payments a key part of that effort.

'Hateful lies and national resentment'

In a separate speech after meeting with Cameron, Schulz said UK's debate on Europe is driven by hateful lies, national resentment and the scapegoating of Romanian and Bulgarian immigrants.

Although Schulz did not criticise him by name, his comments are likely to be interpreted as a stinging rebuke to the British leader.

"The attempt of some people over confrontation – we against the Europeans, the Europeans against us – is wrong. We need the United Kingdom in the European Union, the single market of the European Union is the best way to generate growth and wealth in the United Kingdom," he said.

"We have a common interest, and we should try to cooperate. Some of the proposals of David Cameron I got today, I listened to, and he'll next week present – are very reasonable. We should not underestimate that.

"After the European elections, the commission already began to reduce the amount of initiatives for seeing foreign regulations, so also the principle of subsidiarity which is something we can discuss easily. If we go in that direction, I'm sure we'll find a good exit strategy, but not a Brexit strategy."

Schulz, a German social democrat, had earlier said he thought Cameron had "no chance" of getting the EU to reopen its founding treaties and had urged him to compromise over what he described as "controversial" proposals.

He also said he thought Cameron would fail in his aim to stop EU migrants accessing his country's welfare payments for four years after they arrive in Britain but might have some luck when it came to agreeing new EU-wide rules to fight abuse of member states' social security systems.

A spokeswoman for the prime minister had earlier described his meeting with Schulz as good, though she had said further discussions between the two men would be needed.