By Alex Stevenson Follow @alex__stevenson
Eurosceptic pressure on David Cameron appears to have improved prospects that Britain could win back powers from Brussels, but it is not clear whether any treaty change would result in a referendum.
The European working time directive (WTD), which Britain has long been opposed to, could be watered down and a deal securing the single market's future could be agreed with Germany, according to media reports.
Mr Cameron and chancellor Angela Merkel failed to agree on plans for a financial transaction tax in tense talks in Berlin on Friday.
'All of our customers are international and we need those transport links to be as efficient and effective as possible'
The pair struggled to hide their divisions over how to deal with the eurozone crisis. Britain wants the EU to make the European Central Bank an effective lender of last resort, a plan strenuously opposed in Berlin.
Agreement could be reached over employment laws if the UK allows a treaty change strengthening the EU's ability to punish eurozone countries whose economic policies threaten to undermine the currency.
Ms Merkel would like to see punitive powers moved from the European Council to the European Commission and the European court of justice, the Guardian reported.
Leaders of the EU's 27 member states will negotiate potential treaty changes on December 9th, in a summit which will be the focus of intensive scrutiny from eurosceptic Conservatives.
They have been promised a referendum for any future treaty change and are likely to demand a vote, even for limited treaty adjustments.
Conservative divisions over Europe are becoming clearer and clearer as the crisis rumbles on.
This weekend former deputy prime minister Michael Heseltine predicted that Britain would one day join the euro, saying it would survive because of the "determination" of the French and Germans "to maintain the coherence that they have created in Europe".
London mayor Boris Johnson called for the eurozone's immediate "bisection" into two areas, effectively allowing one half to devalue.
"What I don't think you can do is just pretend that you can create an economic government of Europe effectively run by Germany," Mr Johnson told the Sunday Telegraph.
"That's... not meant to be provocative towards Germany. Germany's just thrust into that position, by sheer economic weight and political necessity. I'm not saying the Germans are being hegemonic in this. But I don't think it's right for us; it's not right for Europe."