France and Italy propose reform of EU border rules

"We want Schengen to survive, but to survive Schengen must be reformed," said Sarkozy. "We believe in free circulation but we believe in a state of law and a certain number of rules."

Berlusconi added: "We both believe that in exceptional circumstances there should be variations to the Schengen treaty."

The agreement - applying to most EU countries as well as Norway, Switzerland and Iceland - is seen as one of the cornerstones of EU integration, relying on solidarity and trust between member states.

But the underlying fragility of the pact was exposed in recent months as around 30,000 migrants - mostly Tunisians - fleeing the aftermath of the democratic uprisings in north Africa began arriving in Italy.

Rome appealed for help from other member states in dealing with the situation, but when no help arrived it granted temporary residence permits to the migrants, many of whom used them to go to France.

This infuriated the French authorities, who started sending back people who could not support themselves economically.

Both leaders were in good humour on Tuesday, however. They agreed on a joint letter to European Commission president Jose Manuel Barroso and EU council president Herman Van Rompuy asking the commission to come up with new proposals and for these to be signed off by member states in June.

At the moment, the border-free agreement can be suspended for national security reasons - often invoked by countries hosting the soccer World Cup.

The Franco-Italian letter wants to broaden this scope to allow for unilateral action on closing borders. It called on Brussels to "examine the possibility of restoring temporary control at internal borders in the event of exceptional difficulties in the management of common borders". The letter does not define what exceptional difficulties are, however.

The letter also calls for the EU to "prepare in advance" a solidarity plan "if a mass influx of displaced persons from Libya were to occur".

The commission has said it will come forward with proposals next week to define what "exceptional conditions" would be needed to "temporarily" reinstate national border controls. These will be discussed by interior ministers on 12 May.

Along with the travails of the eurozone, immigration has become the most controversial topic in the EU. Far-right and populist parties, often expressing openly anti-immigrant sentiments, are soaring in popularity in several states.

Sarkozy is battling the increasing popularity of the far-right National Front ahead of presidential elections next year while Berlusconi's government depends on the anti-immigrant Lega Nord.

But it is not just immigration from beyond Europe's borders that can lead to tensions. Intra-EU immigration can also cause controversy.

A poll for the Cologne-based IW institute showed that 40 percent of Germans fear that when the country fully opens its doors to citizens from eastern European member states from 1 May it will have a negative effect on their jobs.

According to IW, up to 1.2 million foreign workers are expected to migrate to Germany by 2020, with around 800,000 of them expected to come in the next two years.