While negotiations still face difficulties, Prime Minister David Cameron has a "good prospect" of coming to a deal with fellow European Union leaders next month, a top European Commission official has said.
But Jonathan Faull, who is leading the commission's negotiations with the UK, warned that the commission would not be willing to accept anything that threatened the four freedoms the EU was founded on, including freedom of movement.
Despite that, he added "expectations have been raised" that a deal will be sealed next month, before the EU Summit.
"There is momentum leading to a very good prospect that agreement will be reached rather soon," Faull told members of the European Parliament in Brussels.
"We have only a few weeks left. There are still difficult issues remaining to be resolved," Faull added. "I'm not a betting man and I'm not going to put money on it and I wouldn't encourage you to either. But I think there will be very intensive discussions, and from what I can see the political will to resolve this issue is pretty strong."
He also said the commission was working with the UK because " we believe it's in the interest of the EU, and without interfering in any way, we believe it's in the interest of the UK" for it to remain as part of the 28-member bloc.
Cameron is hoping to reach an EU-wide agreement at a summit next month, causing speculation the referendum could be held as early as this summer.
However, Cameron has come up against opposition from fellow EU leaders, who appear unwilling to bend on the Prime Minister's desire to restrick in-work benefits for EU migrants for the first four ears they are in the UK.