By Alastair Macdonald and Robin Emmott
BRUSSELS (Reuters) - European Union governments haggled over reform proposals on Wednesday, with pressure mounting on leaders to close remaining gaps and produce a summit deal on Friday that can help keep Britain in the EU.
Prime Minister David Cameron will discuss a final draft -- expected from summit chairman Donald Tusk late on Wednesday -- when he meets the other 27 EU leaders on Thursday evening.
With a prospect of late-night talks, Tusk has scheduled what aides call an "English breakfast" on Friday in hope of a final compromise that will let Cameron return to London and declare he will campaign to maintain British membership of the bloc at a referendum his EU partners expect him to call for June.
Tusk warned there was no guarantee of a deal and urged leaders in a letter to use negotiating momentum to strike an accord that could preserve the Union as it faces an array of crises including confrontation with Russia in Ukraine and Syria and a huge influx of refugees that has stoked nationalist sentiment.
"There will not be a better time for a compromise," wrote Tusk, a former prime minister of Poland. "It is our unity that gives us strength and we must not lose this. It would be a defeat both for the UK and the European Union, but a geopolitical victory for those who seek to divide us."
Diplomats offered varying assessments of the chance of a deal. One spoke of a possible further emergency summit: "There is blackmail and threats from all sides," he said.
But most saw little appetite for dragging on a debate many see as a distraction from bigger problems, not least the migrant crisis that is the only other major agenda item. And many also see Cameron as a man in a hurry with polls turning against him.
"Cameron needs a resolution," one senior diplomat said. "So it's likely we'll get to something." Another said all seemed ready to sit at the table till a deal was done. "People think if we don’t get it solved now, we’re never going to solve it."
Prime Minister Manuel Valls told French lawmakers a deal was not just possible but vital. "A British exit would be a shock whose consequences for Europe are hard to imagine," Valls said.
German Chancellor Angela Merkel said many of Cameron's demands for EU reform were justified and reasonable.
Key issues unresolved include: concerns in eastern Europe that a deal to help Cameron cut immigration by barring low-paid EU migrant workers from British benefits will hurt their citizens; French insistence the City of London match euro zone regulation; efforts to ensure British exemptions from closer EU integration do not become more widespread; and reluctance in some capitals to commit to future amendments of EU treaties.
CAMERON MUST WIN OVER OWN PARTY
Cameron has stuck to a public line that he is in no hurry to make an agreement, preferring substance over speed, but faces difficulties in persuading some, including his own Conservative party members, that he has achieved any depth of reform.
He and EU officials stress the decision to be taken by the leaders will be legally binding and irreversible. However, diplomats say some governments are concerned that they cannot bind their successors to guaranteeing future treaty change.
Eastern Europeans, whose citizens make up much of the low-paid British immigrant workforce targeted by Cameron's plan for an "emergency brake" on welfare payments to new arrivals, are pushing to limit how long Britain can apply that measure. Some diplomats see a possible compromise to end it after seven years.
They are also concerned that other states do not follow the British lead on that, or on reducing family allowances to migrant workers whose children live in poorer eastern countries.
(Additional reporting by Gabriela Baczynska, Robin Emmott and Philip Blenkinsop in Brussels, Ingrid Melander in Paris and Jussi Rosendahl in Helsinki; Editing by Mark Heinrich)