BRUSSELS (AFP) – The EU's top court on Tuesday backed Britain's right to limit child benefits to European migrants, a hot-button issue in Britain's referendum on its future in the European Union next week.

The decision comes as a series of opinion polls show a growing lead for the campaign for a "Brexit," despite Prime Minister David Cameron's appeals for people to vote to remain in the 28-nation bloc.

The European Court of Justice said it was lawful for Britain to apply a "right-to-reside" rule to EU migrants based on whether they were working or seeking work, and would not be a burden to British taxpayers.

The European Commission, the bloc's powerful executive arm, had taken Britain to court arguing that it had breached EU laws rule granting all European citizens the right to live and work wherever they like in the EU.

"The UK can require recipients of child benefit and child tax credit to have a right to reside in the UK," the Luxembourg-based court said in its judgement.

"Although that condition is considered to amount to indirect indiscrimination, it is justified by the need to protect the finances of the host member state."

Britain's right to limit such child benefits was at the heart of a renegotiation deal that Cameron secured at a European Union summit in February to put before voters in the June 23 referendum.

The deal – which will only take effect if Britain votes to stay in the EU – will also limit the amount of child benefits that EU migrants living in Britain can send back to their home countries.

London welcomes ruling  

In London, the British government welcomed the ruling, saying it "supports our view that we are entitled to ensure only EU migrants who have a right to be in the UK can claim our benefits".

In Brussels, the European Commission said the judgement was an "important and welcome clarification" on the rights of EU citizens to clarify benefits in other EU countries.

It stressed the case had been brought by the previous Commission run by Jose Manuel Barroso, who stepped down in 2014, and that current chief Jean-Claude Juncker's views were closer to the court's stance.

"The way the court clarifies is very close to what this commission thinks and what we're trying to implement in the UK deal," Commission spokesman Margaritis Schinas told a news briefing.

The ruling in Britain's favor had been largely expected.

The top legal adviser to the ECJ had given a similar opinion in October, and a defeat would have been a major blow to the campaign to stay in the EU.

Campaigners for Britain to leave the bloc complain that London's sovereignty is undermined by the EU and particularly by rulings by the ECJ that overrule national decisions.

The European Commission first hauled up Britain on the issue in 2008 but London rejected its complaints.

The Commission then took the case to the ECJ in 2014, arguing that Britain's actions were discriminatory and breached the EU's principles of free movement.

But in its ruling, the court said that "UK authorities verify whether residence is lawful in accordance with the conditions laid down in the (EU) directive on the free movement of citizens".

"It follows that the condition does not go beyond what is necessary to attain the legitimate objective pursued by the UK, namely the need to protect its finances," it added.