British Prime Minister says he will not accept a deal that does not give Britain what it needs
A deal on the UK's relationship with the EU has been "done".
Dalia Grybauskaite, who has been taking part in the negotiations on reforms of the bloc in Brussels, tweeted: "Agreement #UKinEU done. Drama over."
Shortly afterwards, EU Council President Donald Tusk tweeted: "Deal. Unanimous support for new settlement for #UKinEU".
Reuters, which appeared to have access to a draft of the agreement, says it will enshrine UK excemption from the EU principle of ever closer union.
The emergency brake for in-work benefits will be set at seven years, Reuters reports the draft as saying.
All EU states can index child benefits to existing and new claimants from 1 January, 2020 and the UK can index child benefit for new claimants to home country living costs immediately.
British Prime Minister David Cameron will now return to the UK by early on Saturday where he will hold a Cabinet meeting, after which he is expected to call a referendum.
It kicks off potentially four months of campaigning with those who want to stay in and those who want to leave battling to sway the result of the vote, which is likely to be in June.
Meanwhile, David Cameron spoke with the Taoiseach at the margins of the meeting.
Enda Kenny met with Mr Cameron in Brussels this evening to discuss Britain's current strategy and plan to finally secure a deal leading to reform of the UK's membership of the EU.
Irish government figures said earlier that they would look at implementing the same child benefit system that the UK is demanding for EU migrant workers whose families are overseas - this sparked concern among other EU states.
Last night, Enda Kenny intervened on behalf of David Cameron at the 28 member summit, and its likely he'll do so again this evening during further talks.
Divisions over the negotiations ran much deeper than had been expected, and all-night talks about the UK's demands for tighter controls on migrant workers' access to in-work benefits, child welfare as well as a discussion over legislation regulating the eurozone have proved very difficult to resolve.
During a break in proceedings, Mr Cameron tweeted: "Negotiations are continuing into this evening. A Cabinet meeting won't be possible tonight. One will be held if and when a deal is done."
Progress has been held up by a number of stumbling blocks, not least Greece's threat to veto the conclusions of the summit over Europe's handling of the migration crisis.
The Greek Prime Minister Alexis Tsipras threatened the move overnight, a course of action that would be a setback for the British Prime Minister's reform agenda.
The Greeks fear several other EU nations would like to shut its land border with Macedonia, something Athens is strongly opposed to as it fears thousands of refugees and migrants would become trapped on its territory.
Another hold up was French reluctance to accept eurozone reforms, with French President Francois Hollande telling French radio that: "There can be no special status for the UK and the City of London".
Mr Cameron held bi-lateral meetings with four Eastern and Central European nations, where leaders have particular concerns about his proposals on migrant workers.
During Thursday's talks, Taoiseach Enda Kenny implored EU leaders to "help David (Cameron)" get a quick, strong deal to sell to a skeptical party and his Cabinet.
A possible date of June 24th has been suggested for Britain's in/out referendum.
Some Eastern and Central European countries have concerns about how long their citizens will be affected by the emergency brake system which will curtail their access to in-work benefits.
They are also concerned about the reduction in child welfare for workers whose families are based overseas.
President of the European Council, Donald Tusk is understood to have said that talks could go on until Sunday.
David Cameron spoke to reporters on his way back into negotiations in to talks on Friday.
Germany's chancellor Angela Merkel admitted some parties found British requests difficult to accept but she said she remains confident they will find an agreement.
Former Taoiseach John Bruton told Newstalk Breakfast that any Brexit could potentially hurt Irish people working in the UK: "The main casualty would be certainty".
While yesterday, Taoiseach Enda Kenny said Britain staying in the European Union is in "Ireland's interest, Britain's interest and Europe's interest".
He is hoping talks will reach a successful conclusion today.
Finance Minister Michael Noonan says he believes there would not be a land border in Northern Ireland if the UK leaves the European Union.
And Tánaiste Joan Burton said it is important for Ireland that Britain stays within the EU because that trading partnership is worth billions of euro to us.
British entrepreneur Richard Branson has said leaving the EU would be "very, very damaging" for Britain and lead to the eventual break-up of the bloc.
The founder of Virgin Media, who owns TV3 Ireland, says he hopes "sense prevails" when he comes to the referendum and Britain stays in.
"I think it would be a very, very, very, very sad day if British people voted to leave," he said.
"I think it would be very, very damaging for Great Britain...and I think it would be the start, most likely, of the break-up of the European Union".
He highlighted the fact that there have not been any wars within the bloc since World War II.
"The European Union has managed to avoid any wars within the European Union since the Second World War," he said.
"In the Second World War, my father fought again the Germans. In the First World War, my grandfather fought, my great-grandfather fought 20 years before that".
"I mean having the European Union there are just so many benefits and I just hope sense will prevail when it comes to having the vote on it".
The British-Irish Chamber of Commerce says not enough attention has been given to the possibility of Britain leaving the EU.
The organisation, which aims to develop the trading relationship between Britain and Ireland, is holding its annual conference in Dublin today.
John McGrane, director general of the British-Irish Chamber of Commerce, says not enough time has been given to talking about what will happen if Britain leaves.
"We have loads of facts about what would happen if Britain remains. Because it is essentially today's world, enhanced by whatever comes out of the ultimate settlement that Britain will reach, and that Ireland will support it in reaching.
It is a trade-off of facts between the known and the complete lack of facts about the unknown world in a situation where the UK would have chosen at its own discretion to leave".