A 'red card' system to block EU laws among the proposals
The British Prime Minister David Cameron insists he has made real progress in re-negotiating the UK's relationship with the EU.
His next step is to get other EU leaders to back the plans.
Mr Cameron said the blueprint for Britain's new deal with the EU delivers "substantial change" but "more work" was still needed.
He said the draft proposals offered "real progress" in each of the four demands he had made of European leaders in his renegotiation of Britain's deal with the EU.
European Council president Donald Tusk hailed the package as "a good basis for a compromise".
The new deal includes a "red card" for countries to block unwanted EU legislation and an "emergency brake" to stop in-work benefits for migrants.
However, there are still a number of "outstanding issues" including closing a back-door loophole for non-EU migrants and safeguards for non-Eurozone countries.
And a key pledge by Mr Cameron to prevent EU migrants claiming child benefits and sending it back to children in their home country has not been met.
Instead child benefit payments for children living in the EU citizens home country will be linked to the standard of living in that country.
Mr Cameorn said: "At the beginning of this process we set out the four areas where we wanted to see substantial change, and this document delivers that substantial change".
"But of course there's still detail to be worked on, there's important things to be secured and further work to be done. And of course there's a negotiation at the European Council. So hard work but I think we've made real progress".
"On so many things I was told these things would be impossible. I said I wanted a Red Card system for national parliaments to block legislation – people said you wouldn’t get that; it's there in the document".
The release of the draft comes after London Mayor Boris Johnson, who is likely to be a key figure during the referendum campaign, said there was "much, much more...that needs to be done".
He voiced "doubts" about the "red card" system and the "emergency brake" saying neither appeared to go far enough despite Mr Cameron's "very good job of renegotiating - at huge speed - a very difficult package of measures".
The draft proposal will now be considered by EU leaders before a summit meeting on February 18th and 19th, when they will attempt to agree a final renegotiation deal.