Britain will act "within the law" over a harsh new crackdown on benefits for immigrants, No 10 has said - despite illegal proposals being considered in Whitehall.
The government is considering quadrupling the time new arrivals from the European Union must wait before being eligible for receiving benefits from the current three months to one year.
The move is reportedly part of the package of changes sought by Britain in the renegotiation process which could culminate in an in-out referendum by 2018.
It is likely to break EU law stating that there should not be a different rule for immigrants on welfare issues.
"Of course we are always looking at what more could be done. That process is going on," the prime minister's spokesman said.
When pressed on whether the change would be illegal, the spokesman added: "The government acts within the law."
Controversy over the treatment of immigrants comes ahead of increased public concern about the lifting of the ban on new arrivals from Romania and Bulgaria.
Britain negotiated the maximum five-year delay on their arrival after the two countries joined in the EU, but now faces an estimated 40,000 new arrivals in 2014.
Bulgarian ambassador Konstantin Dimitrov has triggered right-wing anger by revealing that the Home Office has not rejected a single work permit request in the last six years.
Underlining the threat from Ukip ahead of next year's European elections, the party's deputy leader Paul Nuttall said it was "ludicrous" that Britain has one million young people out of work when net immigration continues to run at above 170,000 people a year.
No 10 said the coalition had managed to cut net migration by a third, but Dimitrov complained: "The government need to be restricting migration from countries like Bulgaria but instead they are opening the doors completely next year.
"It is utterly stupid and irresponsible."
Many observers believe the Ukip threat is driving the coalition's firm drive against immigrants. It has emerged ministers are also considering stripping migrant workers of child benefit.
The issue could prove a divisive one among Liberal Democrats in government, with a split over the Cabinet table now looking likely.
"I can understand the concern, I can see the need for robust transitional arrangements," Scottish secretary Alistair Carmichael told BBC Radio 5 Live.
"I would need to be persuaded of that but I am prepared to look at the whole situation in the round."
Education secretary Michael Gove insisted the reforms were striking the "right note" among voters, however, ahead of next year's European elections.
"When it comes to new migrants from accession countries in the EU, we need to look properly at the benefits system here to make sure people are coming here to work and contribute, not to take advantage of what is rightly a generous welfare system," he told BBC1's The Andrew Marr Show.