UK 'prepared to walk away from EU'
The UK has to be prepared to "stand up from the table and walk away" if negotiations over the country's relationship with the European Union are unsuccessful, Philip Hammond has said.
The Foreign Secretary said he thought agreement was possible, including "stretching" freedom of movement rules to curb the number of migrants from within the EU coming to the UK.
But he acknowledged that the UK would not be able to regain "unfettered" control of its borders while it remains in the 28-member union.
He told the Daily Telegraph it was possible to get "substantial, meaningful reform" to immigration rules without a treaty change, potentially removing one of the obstacles to David Cameron's hopes of renegotiating the UK's relationship with Brussels before an in/out referendum by the end of 2017.
But Mr Hammond said: "If your ambition is that we have total, unfettered control of our own borders to do what we like, that isn't compatible with membership of the European Union, it's as simple as that.
"And people who advocate that know jolly well it is not compatible with membership of the European Union. So if that's what you want, you're essentially talking about leaving the European Union."
However, he added: "If what you want is the ability to avoid the kind of destabilising movements that we've seen over the last decade or so - large waves of migrants settling in concentrations that puts pressure on public services ... if that's what we want to deal with, I think there are ways we can agree to deal with these things with our partners in Europe.
"We're in the beginning stages of a negotiation and - first of all, never, never go into any negotiation unless you're prepared to stand up from the table and w alk away. We have to be prepared to."
Mr Hammond told the newspaper he is already in behind-the-scenes talks with European politicians to establish what their "red lines" are ahead of Britain's renegotiation.
German chancellor Angela Merkel has made clear she regards the principle of free movement of labour within the EU as non-negotiable and is reported to have warned the Prime Minister that his drive is pushing Britain towards ''a point of no return'' on the road to exit from Europe.
Similar concerns were aired by northern European leaders at a summit earlier this month , where Mr Cameron acknowledged there were ''different perspectives'' but insisted there was ''common ground'' on the need to reform.
Mr Hammond conceded there will be "problems in getting a freedom of movement solution" but added that warnings that Germany would not allow changes were not "strictly true".
The Germans "are aware of the fact that we have to deal with what is perceived to be a real issue in the UK if we're going to win a referendum and keep the UK in the European Union", he said.
But in a further sign of the strains in the relationship between the Prime Minister and European counterparts, reports suggested a senior figure in French president Francois Hollande's administration compared Mr Cameron to far-right leader Marine Le Pen.
T he senior French government figure told the Telegraph that Mr Cameron's behaviour over the shock demand for an extra £1.7 billion contribution from the UK to EU coffers had been "completely crazy".
"Marine Le Pen would behave like that in France, because it is the best way to show that there is no European solidarity," said the source, reported to be close to the president.
Mr Hammond's comments follow a stark warning from former prime minister Sir John Major that the UK's future in the EU was in the balance.
Sir John warned that the chances of Britain leaving the EU were "just under 50%", and warned that "Brexit" would become more likely if the renegotiation of its membership promised by Mr Cameron went badly.
Mr Cameron is expected to set out his plans to address European migration in the coming weeks as the Tories seek to counter the rise of Ukip.
The Eurosceptic party hopes to gain its second MP at the expense of the Conservatives in the by-election in Rochester and Strood on November 20.