Home Secretary Theresa May has described the EU proposals unveiled on Tuesday as "a basis for a deal".
Mrs May - who had been tipped as a possible leader of the "out" campaign - said more work needed to be done on the plan set out by European Council president Donald Tusk.
In a statement, Mrs May said: "EU free movement rules have been abused for too long and EU law has stopped us deporting dangerous foreign criminals.
"That is plainly wrong and it is encouraging that the commission has agreed with the UK that we should take action to address these two issues.
"So we have made progress and negotiations continue ahead of the February council. As the Prime Minister has said, more work needs to be done, but this is a basis for a deal."
David Cameron is expected to warn that voting for a "Brexit" would result in refugee camps springing up across the south-east of England.
If voters chose to stay - whenever the referendum comes - the deal upon which that decision was reached may not be the final word.
As his tour of Europe gets underway, David Cameron faces a fight to stop his proposed EU deal being watered down further.