German Chancellor Angela Merkel has launched a stark warning to Britain that if Prime Minister David Cameron puts stricter limits over immigration, it will be a "point of no return" for the UK.
In weekly German magazine Der Spiegel, sources said Merkel's office and the foreign ministry are becoming increasingly concerned that Britain is looking to radically curb immigration, in a bid to appease supporters of political parties that favour closing the borders.
"Should Cameron persist [in this plan], Chancellor Angela Merkel would abandon her efforts to keep Britain in the EU. With that a point of no return would be reached," said the sources quoted in the report.
"That would be it then," said the source.
Cameron pledged to let Britons vote for either exiting and staying within the European Union via an in/out referendum scheduled for 2017, if his Conservative party remains in power after the general election next year.
The Tories, as well as Labour and Liberal Democrats, are under increased pressure to curb immigration amid growing support for political parties, such as Ukip, that are in favour of stricter border control and exiting the union.
Last month, the President of the European Commission warned Cameron that he is being too complacent with how much opposition there may be in the run up to the EU referendum.
In a Chatham House speech, Jose Manuel Barroso said pro unionists should make more of a "positive" case for Britain staying within the EU because he thinks that UK politicians haven't fully prepared for potential opposition towards remaining part of the union.
"[There are] widespread concerns in the UK and elsewhere about abuse of free movement rights.
"The Commission has always been ready to engage constructively in this discussion. But changes to these rules need all countries to agree.
"And it is an illusion to believe that space for dialogue can be created if the tone and substance of the arguments you put forward question the very principle at stake and offend fellow member states.
"It would be an historic mistake if on these issues Britain were to continue to alienate its natural allies in central and eastern Europe, when you were one of the strongest advocates for their accession."
In the same month, Merkel said: "On the other hand, we must not interfere with the fundamental principles of free movement in Europe."