CHINGFORD MP Iain Duncan Smith has warned that taxpayers could face a £2.5 billion bill if the European Union forces Britain to relax its rules on benefits claims by those living abroad.

The UK has reportedly been threatened with legal action over the Coalition’s proposed social security reforms, which would see the introduction of a universal credit system.

It is claimed the commission in Brussels believes the proposals discriminate against foreigners, with a ‘right to reside’ test being too tough.

Writing in the Telegraph, Duncan Smith said the move was part of a wider attempt by ‘unelected and unaccountable’ authorities to extend their authority over Britain.

He said he fears his benefits reforms could be in jeopardy if Britain is forced to pay a wide range of benefits to people when they arrive, even if they do not have any previous link with the UK.

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