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Jose Manuel Barroso said he did not want ''a relentless march to one single super state, as some will have us fear''
David Cameron is to set out further plans to curb the rights of EU migrants to work in the UK before Christmas.
No 10 is said to be examining several options but no decision has been taken.
Speaking in London, outgoing European Commission head Jose Manuel Barroso said the EU would consider "legitimate concerns" but suggested an "arbitrary cap" on migrants would not be accepted.
Downing Street has rejected claims it risks alienating other member states and putting its EU membership in doubt.
The BBC's political editor Nick Robinson said it was not clear what the new measures would be or whether the prime minister would announce them before the Rochester and Strood by-election on 20 November, where the Tories are trying to prevent UKIP from snatching the seat.
'Emergency brake'In recent days, it has been reported that the UK could seek an "emergency brake" to stop EU migration after it reached a certain level or to limit the number of National Insurance numbers issued to new arrivals from the EU.
Mr Cameron has said the relationship with the EU will be reformed ahead of an in/out referendum, to be held by the end of 2017, if he remains in office after next year's general election.
Mr Barroso warned at the weekend that the PM's hopes of curbing EU immigration could be illegal.
Analysis by political editor Nick Robinson
The prime minister will announce plans to limit EU migration before Christmas but the search is still on for a way to do this without needing to re-write the founding treaty of the EU - the Treaty of Rome - which enshrines the principle of the freedom of movement of people.
There is some frustration amongst the prime minister's advisers that ideas are leaking out before they have had proper time to assess them.
That, of course, is the problem with simultaneously trying to solve a political problem - the rise of UKIP - by talking up how tough you'll be in Europe at the same time as considering whether any of your promises will be agreed to by 27 other EU countries.
Read more from Nick
In a speech at think tank Chatham House, he repeated his view that an "arbitrary cap" on immigration would not accepted by other EU states, saying the EU was willing to "accommodate the UK's legitimate concerns" but not if they challenged the fundamental principles of the organisation.
He acknowledged that there were "widespread concerns in the UK and elsewhere about abuse of free movement rights".
But he added: "Changes to these rules need all countries to agree. And it is an illusion to believe that space for dialogue can be created if the tone and substance of the arguments you put forward question the very principle at stake and offend fellow member states."
'Ever-closer union'"It would be an historic mistake if on these issues Britain were to continue to alienate its natural allies in central and eastern Europe, when you were one of the strongest advocates for their accession."
Continued EU membership, he argued, was in the UK's economic, political and security interest and he urged pro-EU politicians to make the case more loudly for its benefits.
While there would be further integration in future, Mr Barroso rejected suggestions there was "a relentless march towards a superstate" in the EU, saying he believed in a "ever-closer union of the peoples of Europe acting as sovereign nations".
He warned against "counter-revolution" within the 28-member body, saying that for countries which "accept the rules of the club there will always be a place and equality of treatment".
In a question and answer session with journalists and business leaders, Mr Barroso challenged those who wanted to leave the EU to set out their alternative vision for the UK's future.
"There are always alternatives but it would be a worse alternative," he said.
And he dismissed criticism of him by Conservative chairman Grant Shapps as an "unelected bureaucrat".
Mr Barroso, whose terms of office ends next month, said he had spent years in government before becoming EC president, had twice been elected as president by the elected members of the European Parliament and said the commission was created by member states not some "supernatural authority" - he added that he was not aware of who Mr Shapps was.
'Final destination'Tory backbencher Bernard Jenkin suggested Parliament could pass a law introducing a cap on EU migration by the end of the year and the issue would then be a political rather than a legal one.
The Lib Dems and Labour support more limited reforms to migration rules focused on new members.
Labour said Mr Cameron had a history of making "big promises on immigration and not delivering" while Deputy Prime Minister Nick Clegg said he believed in "reform not exit".
"The Conservatives are embarked on a strategy which has only one final destination - which is leaving the EU altogether," the Lib Dem leader told his monthly press conference.
UKIP MP Douglas Carswell told the BBC's Daily Politics that the PM was being forced into a "panic reaction" ahead of the Rochester poll and was wrongly seeking to "pretend you can remain in this club and control who comes into the country".
Employers' group, the CBI, said business recognised the free movement of workers within the EU was a "sensitive" issue but believed that it was "an essential part of the single market".
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