Speaking in central England, Cameron said EU migrants must have a job offer before coming to the U.K. and once working, they cannot claim some welfare payments or social housing unless they have been in the country for at least four years. EU job seekers who have not found work within six months will be required to leave.
The announcement came a day after official statistics showed net migration to the U.K. rose to an estimated 260,000 from June 2013 to June 2014. The rise was 78,000 higher than the previous year. Net migration is calculated by subtracting the number of people leaving the country from the number entering it.
Cameron previously said he hoped to reduce net migration to less than 100,000 before the general election in May.Stopping short of calling for a cap Friday — a move that would be unacceptable to other EU members — Cameron said Britain supports freedom of movement, but it is not "an unqualified right."
The prime minster called on other EU leaders to support his plans, which he said would require changes to EU treaties. He vowed to get the EU — which has 28 member states — to accept reforms before holding a referendum on Britain's membership in 2017.
"If our concerns fall on deaf ears and we cannot put our relationship with the EU on a better footing, then of course I rule nothing out," Cameron said. "Immigration benefits Britain but it needs to be controlled, it needs to be fair and it needs to be centered around our national interest."
"We are Great Britain because of immigration, not in spite of it."But he added it was not wrong to express concerns about the scale of people coming into the country.
"People have understandably become frustrated. People want the government to have control over the number of people coming here and the circumstances in which they come," Cameron said.
Most EU members imposed temporary restrictions on workers from the eight former Communist countries that joined the union in 2004: Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia. However Sweden, the U.K. and the Republic of Ireland did not.
Britain then saw a dramatic rise in migrants from new EU members, particularly from Poland — sparking animosity among some Britons citing increased pressure on public services.
Cameron's speech came days after a second candidate from the anti-European Union, anti-immigration U.K. Independence Party (UKIP) was elected to parliament.
Nigel Farage, the party's leader and a member of the European Parliament, tweeted after the speech that Cameron owed the British people "an apology for his broken promise on net migration."
"It's taken Mr Cameron nearly 10 years as Tory leader to realize what he claims to have realized today," he tweeted.
Ed Miliband, leader of the formerly governing Labor Party, previously admitted the party got "the numbers wrong" when estimating the number of migrants who would arrive in Britain after the Eastern European states joined the EU in 2004.
Following the prime minister's address, Miliband told the BBC that Cameron had "no credibility on immigration."
"People aren't going to believe his new promises when he has broken his old promises," he said.EU Commission spokesman Margaritis Schinas said Cameron's ideas should be studied "without drama."
Several other EU countries already have taken measures against immigrants who claim welfare without seeking work.
"It is up to national lawmakers to fight against abuses of the system, and the EU law allows for this," Schinas said.
The changes announced Friday will depend on Cameron remaining in power after May's election.
Cameron said the fact that Britain has the fastest-growing economy in the the Group of Seven leading industrial economies, combined with its generous welfare system, made it a "magnetic destination" for EU migrants.
Further action is also needed to reduce the number of migrants from non-EU countries, which is more tightly controlled by the government, he said.
