Britain's finance minister has shrugged off a report which said German Chancellor Angela Merkel would abandon her attempts to keep the UK inside the European Union if it pressed ahead with plans to curb immigration from other EU countries.

"I think it's a little bit thin," George Osborne said of the report in Der Spiegel, saying his own contacts with the German government had shown Berlin understood British public disquiet about unemployed EU migrants claiming welfare benefits.

"The British public want this addressed. We are going to do this in a calm, rational way," Osborne told BBC TV, referring to a promise by UK Prime Minister David Cameron to set out new ideas about how to tackle the issue before the end of the year.

Under growing pressure from the anti-EU UK Independence Party ahead of a May 2015 national election, and from many of his own politicians, Cameron has said he would like to try to curb EU immigration if re-elected, a move Brussels says would infringe the right to free movement.

'Point of no return'

Der Spiegel, a German weekly news magazine, reported on Sunday that Merkel had warned Cameron that such a policy would be a "point of no return" that could sharply increase the risk of Britain leaving the EU.

If re-elected, Cameron has pledged to renegotiate the UK's EU ties before giving Britons a membership referendum in 2017 amid public disenchantment about the government's failure to curb immigration because of the country's EU membership.

A spokesman for Merkel said on Monday that Germany wants Britain to remain an "active and engaged" member of the EU but will not cede on Cameron's plans to curb immigration from other EU countries.

Cameron has not yet set out what those plans are, but has made it clear he wants to find a way of respecting the EU's rules which guarantee freedom of movement to work, while clamping down on what he has called "freedom to claim benefits".

Germany has expressed sympathy with such a position in the past and Merkel's spokesman said there was "strong interest" in co-operating with Britain to tackle any abuse of the freedom of movement regime.

Osborne said concerns about EU immigration were running so high in Britain that Cameron's Conservative Party was obliged to explain how they would address them if re-elected.

"It was never envisaged that you would have such large numbers of people coming, who don't have job offers, people who move on to our benefit system," said Osborne. "And that causes a lot of public unhappiness."

Source: Agencies