"He noted that the scale of what we are asking for means we will not resolve this in one go and consequently he did not expect to get agreement at the December European Council," a statement issued after a call with German Chancellor Angela Merkel said.
The statement, issued as Cameron met his Bulgarian counterpart Boyko Borissov, added that Britain was still hoping for a "substantive discussion" of Britain's renegotiation bid.
"We'll keep up the pace of negotiations and we'll use this summit to... Work on solutions in the toughest areas because we do need reforms in each and every area I've set out."
The news came the day after European Council President Donald Tusk was quoted as saying that Cameron was aiming for a deal at an EU summit in Brussels scheduled for December 17 and 18.
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"If he is ready to take this risk, I will be helpful. But then, it would be his risk," Tusk said in an interview published by several European newspapers.
Earlier in the year, British officials had also indicated they thought a deal was possible at this month's summit.
However, a string of other issues are expected to dominate the summit, which is being held in the wake of last month's Paris attacks which killed 130 people and an ongoing migrant crisis linked to the war in Syria.
Britain is due to hold a referendum before the end of 2017 on whether to leave the European Union or stay in, with the vote widely expected to take place next year.
His spokesman confirmed earlier today that this demand still formed a "core" part of Britain's renegotiation strategy despite opposition from countries like Poland which have a high level of migration to Britain.
The British leader has called the referendum a "once-in-a-generation" choice and says he wants to stay in the EU subject as long as he can secure the changes he wants to Britain's relationship with Brussels.
Opinion polling suggests that the British public are finely balanced on whether to remain in the EU or leave.