British Prime Minister David Cameron on Thursday said good progress has been made at the EU summit in Brussels to renegotiate its relationship with the European Union.

He said that the EU is ready to compromise on his proposal to cut the four-year in-work benefits for the EU migrants. Cameron believes that Britain would reach an agreement on the proposal by February, although many EU members have opposed it.

"We are attempting something very difficult, attempting something that hasn't been tried by another country and that is to renegotiate our position inside this European Union at a time of our choosing, with a mandate of the British people," Cameron said, according to BBC.

"There's still a lot of hard work to be done but there is a path through this to a better deal for Britain... The commission said that they believed there were solutions - not compromises, solutions. I am confident after tonight that we can find solutions," the prime minister added.

The EU members who have opposed Cameron's proposal to ban EU migrants from claiming in-work benefits for four years, are of the view that this is "discriminatory".

If the EU migrants will have to compromise with their benefits, then the migrants from Britain may also have to give up the benefits to comply with the EU treaties, according to The Telegraph.

European Council President Donald Tusk, who is heading the negotiations at the Summit, also said that the EU and Britain will try to reach a consensus through compromises, adding that even Cameron is against discrimination.

"The clearest message from David Cameron is that everyone including David Cameron is not ready to accept discrimination... It is for him unacceptable," The Telegraph quoted Tusk as saying. 

"Building on this positive debate we agreed to work together to find solutions in all four baskets raised by Prime Minister Cameron," BBC quoted Tusk. 

German Chancellor Angela Merkel also said that the EU can make changes to the treaty to introduce Cameron's reform proposal but with compromise from both sides.

"We made it clear that we are ready to compromise, but always on the basis that we safeguard the core European principles, which include non-discrimination and free movement," Reuters quoted Merkel as saying.

Britain's proposal on the immigration issue was discussed at a dinner meeting of 28 EU leaders in Brussels on Thursday.

UK has to have a referendum or a nationwide vote in 2017 to decide whether to remain a member of EU or not. Britain has proposed four deals, including ban on in-work benefits for EU migrants, to negotiate its membership at the European Union.