EU renegotiations: David Cameron gets 'unanimous agreement' as Britain is given 'special status' in Union

David Cameron has struck a deal with other EU leaders over Britain’s future in Europe after marathon talks in Brussels.

"I have negotiated a deal to give the United Kingdom special status inside the European Union," Mr Cameron said in a press conference shortly after the end of talks, adding that he would update Cabinet at 10am this morning.

"Britain will be permanently out of 'ever closer union'," he said, adding that there would be "tough new restrictions on access to our welfare system for EU migrants", and that Britain would "never join the euro".

Donald Tusk, President of the European Council announced the agreement after more than 24 hours of agonising discussions over British demands to curb benefits for migrant workers.

“Unanimous support for new settlement for the UK in Europe,” he said after a final agreement was signed off at dinner of 28 EU members in Brussels.

The agreement, which has yet to be published, is expected to see Britain compromise on key elements of Mr Cameron’s demands to restrict welfare payments to Eastern European workers.

But after the meeting the Justice Secretary Michael Gove and at least five other cabinet ministers are expected to break ranks and defy Mr Cameron by ¬arguing for Brexit in the European Union membership referendum.

One or more had hoped to address a major anti-EU rally in London on Friday night but they were forced to hold their peace when Mr Cameron’s EU renegotiation summit dragged on into a second day.

Mr Gove’s expected decision to support the Out campaign will be a bitter blow to Downing Street as he is among the Prime Minister’s closest confidants and a family friend. Mr Cameron has made huge efforts to persuade the Justice Secretary to campaign for Britain to remain in the EU based on a reformed relationship between London and Brussels.

But sources close to Mr Cameron said that Mr Gove had decided with a “heavy heart” he could not back the Prime Minister on the issue.The Spectator reported that Mr Cameron’s allies seem “pretty much resigned to losing Michael Gove to the Out campaign once the deal is done”.

Mr Gove has been torn between his loyalty to the Prime Minister and his long-standing support for Britain pulling out of the bloc.

The Justice Secretary’s defection to the Brexit campaign would boost its credibility – although it is understood he would take a relatively low profile – and could encourage other wavering ministers to follow suit.

A spokesman for him said: “Michael’s position has not changed – he supports the Prime Minister’s strategy to renegotiate our relationship with the European Union. As he has said before, it would be premature for anyone to make a judgement before the deal is concluded. Like the Prime Minister, he has not ruled anything out.”

Mr Cameron cancelled a cabinet meeting provisionally scheduled for Friday afternoon at which he had hoped to report back on a deal secured in the Brussels talks. That would have marked the point at which collective responsibility would have been suspended and ministers could have gone public over their support for Brexit.

A prominent role will be played in the Out campaign by Iain Duncan Smith, the Work and Pensions Secretary, who is a long-term advocate of withdrawal from the EU.

He is among the several cabinet members who have complained to Mr Cameron over the collective gag placed on Eurosceptic ministers ahead of the referendum -campaign.

The Commons Leader, Chris Grayling, and the employment minister, Priti Patel, look certain to join the campaign, as well as John Whittingdale, the Culture Secretary, and Theresa Villiers, the Northern Ireland Secretary.

Boris Johnson, the Mayor of London, is still keeping the Prime Minister guessing over his intentions, although he has promised to set out his position “with deafening éclat” if Mr Cameron clinches a deal in Brussels.

Speakers at the Grassroots Out rally included the Ukip leader Nigel Farage, the senior Conservative MPs Sir Bill Cash and David Davis, Labour’s Kate Hoey and the economist Ruth Lea.

Ahead of the rally Mr Davis said: “This whole long drawn-out renegotiation process has highlighted the EU’s undemocratic institutional arrogance. It shows the utter disregard Brussels has for member states. It is the perfect example of how Britain is ruled by the EU.”

After 24 hours of talks in Brussels, Mr Cameron made little progress in thrashing out a compromise on his reform demands.

Eastern European countries stood firm in their position that any deal should not allow Britain to restrict child benefits to migrant workers immediately, calling for the plan to be phased in over 16 years.

At the same time they pressed for the emergency brake for in-work benefits to be limited to an initial period of two years, with tough tests for any extensions. Mr Cameron is understood to have made clear that this would be unacceptable during a series of tense and sleep-deprived bilateral meetings throughout the day.

A full European Council meeting had been scheduled to rubber-stamp the plan at 11am, but what had been billed as an “English breakfast” soon turned into an “English lunch” and finally an “English dinner” as a deal proved elusive.

Mr Cameron, who only left the Council building for three hours’ sleep at 5am, returned for another session including talks with the French, Italians, Poles, Czechs and Germans in an attempt to find a compromise. By early evening the Council President Donald Tusk decided to reconvene the whole Council despite no agreed deal being on the table in an attempt to use “peer pressure” to force a compromise.

British diplomats said they were ready to fight their corner to resist the deal being watered down.

While no threat was made to walk away, a Downing Street source made clear Mr Cameron was prepared to leave if he came under too much pressure to compromise. “You have to remember that we don’t have to hold the referendum until 2017,” they said.

Additional reporting by Independent staff