Brexit: Angela Merkel indicates UK could restrict freedom of movement and keep access to Single Market

Freedom of movement became a significant issue for the 52 per cent of Britons who backed Brexit

German Chancellor Angela Merkel addresses guests at a meeting of the Confederation of German Employers' Associations (AFP/Getty Images)

Angela Merkel has suggested she is prepared to discuss the parameters of free movement of people in the European Union as Britain prepares for Brexit.

The German Chancellor said the EU could not divide its four freedoms — movement of goods, capital, people and services — to allow Britain to restrict immigration while retaining tariff-free access to the market of close to 500 million people.

However, she opened the possibility of discussions on the framework of the free movement of people, which became a significant issue for the 52 per cent of Britons who backed leaving the EU.

"Were we to make an exception for the free movement of people with Britain, this would mean we would endanger principles of the whole internal market in the European Union, because everyone else will then want these exceptions," Ms Merkel told a meeting of Germany's BDA employers association, Reuters reports.

Discussing the finer detail of defining free movement of people, she added: "And so I personally am of the view that we will have to discuss further with the [European] Commission when this freedom of movement applies from."

Ms Merkel said if, for example, someone came to Germany from eastern Europe and worked for a short time but acquired a life-long claim to welfare benefits, "then I see a question about which we must talk again".

She added: "Free movement applies to me in the sense that the employee himself earns the money he needs for himself and his family in the other member state."