Cameron will put ‘heart and soul’ into staying in EU after sealing deal PM bullish on campaigning for Britain to remain in reformed EU after marathon talks result in agreement

David Cameron has pledged to campaign with “all my heart and soul” to keep Britain inside a reformed EU in an in/out referendum after he succeeded in renegotiating the terms of Britain’s EU membership.

A marathon round of talks over two days, during which the prime minister managed just three hours of sleep in the early hours of yesterday morning, led to an agreement for the UK shortly after 9pm yesterday.

The prime minister will hold a cabinet meeting at 10am on Saturday where he will recommend that the government formally endorses the deal, allowing him to announce a referendum on 23 June.

A red-eyed prime minister, who kept going during the talks with packets of Haribo sweets, said at a late-night press conference at the end of the summit in Brussels: “In an uncertain world is this really the time to add a huge new risk to our national and our economic security? I don’t believe that is right for Britain. I believe we are stronger, safer and better off inside a reformed EU and that is why I will be campaigning with all my heart and soul to persuade the British people to remain in the reformed EU that we have secured today.”

But in a major setback for the prime minister he was forced to admit that his close cabinet friend and ally, the justice secretary Michael Gove, will use the lifting of collective cabinet collective responsibility to campaign to leave the EU.

The prime minister sought to make light of Gove’s decision. “Michael is one of my oldest and closest friends but he has wanted to get Britain to pull out of the EU for about 30 years,” he said. “So of course I am disappointed that we are not going to be on the same side as we have this vital argument about our country’s future. I am disappointed but I am not surprised.”

Gove, a longstanding Eurosceptic, has been agonising for months about whether to follow his conscience or support his friends and allies, Cameron and George Osborne, in favour of EU membership.

The prime minister brushed off questions about whether Boris Johnson, who will now face pressure to follow Gove’s lead, will also campaign to leave. “Other politicians will have to make up their minds and they will have to make their own announcements. But in the end it is the British people that will decide.”

In a lengthy statement, which will form the basis of his main message in the referendum, the prime minister said that he had strengthened his key demands since the European council president, Donald Tusk, outlined his draft agreement on 2 February. The key changes will mean that:

• A proposed “emergency brake” on EU migrants claiming in-work benefits will last for seven years. It will cover individuals for no more than four years, but the UK will be allowed to apply the overall restrictions for seven years.

Cameron said: “You will not get full access to our welfare system for four years … No more something for nothing. People can come to our country but they will not get out of our welfare system until they have paid in. That is a very profound change.”

• Restrictions on child benefit for EU migrants will kick in at a reduced rate – indexed to the rate of a migrant’s home country – for new migrants with immediate effect. Existing EU migrants will be paid at the lower rate from 2020. Eastern European countries had hoped that existing migrants would be exempt.

• Britain has a specific opt-out from the EU’s historic commitment to forge an “ever closer union among the peoples of Europe”.

• One country – in effect Britain – will have the right to impose a handbrake to refer contentious financial regulation to a meeting of EU leaders in the European council.

The prime minister said: “When we set off down this track and I said we would renegotiate our membership from a standing start, people said you will never hold that renegotiation, you’ll never hold that referendum, you will never get people to agree to the things we want. But look at what we have agreed today.”

But the prime minister will now be thrown into the most perilous phase of his premiership even though he claims he has strengthened the draft deal for Britain, which was seen as underwhelming – even by some pro-Europeans.

The move by Gove will electrify the leave side in the EU referendum and put pressure on Johnson to follow his lead. The London mayor has irritated Downing Street with a series of demands – firstly for two referendums and then for a declaration of the sovereignty of parliament – while claiming he cannot make up his mind.

Senior figures in Vote Leave, whose campaign director Dominic Cummings helped Gove deliver his controversial free schools programme as his senior special adviser, have been confident that they would win over a heavy-hitting minister.

They hope that a mainstream figure such as Gove will help them reach out in the referendum to middle-ground undecided voters, even if the justice secretary eases the blow for Cameron by not taking a high-profile campaigning role.

A victory for the leave side in the referendum, which is expected to be held on 23 June, would probably terminate Cameron’s premiership and kill off Osborne’s hopes of leading the Tory party.

The prime minister would be told by the 1922 committee of Tory backbenchers that he could not lead the two years of negotiations over Britain’s exit from the EU after failing so spectacularly in his goal of keeping the UK in a reformed EU.

Gove has been making clear in semi-private that he has been torn by a profound belief that Britain should break free from the shackles of EU membership and a deep sense of loyalty to both the prime minister and the chancellor.

He knows that joining the leave campaign could terminate the political careers of his two great friends and boost the leadership chances of Johnson and Theresa May.

The prime minister, who has been kept fully informed about Gove’s thinking, showed the pressure when he warned EU leaders that it would be “suicide” to expect him to sell a watered-down deal to the British people.

In an impassioned plea on Thursday night, Cameron warned his counterparts in Brussels that they were risking suicide if they expected him to run a referendum campaign to keep Britain in the EU without a “credible” deal. According to witnesses to the exchanges, the prime minister told the other EU leaders that he would lose the support of the cabinet and would lose the referendum if he did not obtain a satisfactory outcome.

European leaders reconvened their formal proceedings after a gap of nearly 20 hours at 8.45pm Brussels time yesterday. Donald Tusk, the European council president who had held a series of bilateral meetings with EU leaders through Thursday night and throughout the day yesterday, tabled a proposed agreement.

The prime minister, who had three hours’ sleep on Thursday night after leaving the conference venue at 5.30am after two meetings with Tusk in the early hours, entered the talks last night needing to defend key elements of the proposed deal.

By early evening it became clear that François Hollande was prepared to accept new protections for non-eurozone countries. Cameron, who spoke to Hollande during the day in the company of Tusk, assured the French president that the UK was not seeking to carve out a special deal for the City of London with a veto over financial services regulation.

Friday night’s agreement came after an intensive two days of negotiations in which he held three meetings with Tusk, two with the Polish prime minister Beata Maria Szydło, and a meeting each with Angela Merkel, Italian prime minister Matteo Renzi, Danish prime minister Lars Rasmussen and Czech prime minister Bohuslav Sobotka.