Austria has vowed to press ahead with plans to cap the number of asylum seekers entering its borders despite being told that it would be breaking the law.

The Austrian government stuck to its guns as European Union leaders struggled to end their fragmented approach to managing Europe's biggest refugee emergency since World War II.

In tense late night talks in Brussels last night, the leaders also decided to hold a summit in early March with Turkey, which has been the source of hundreds of thousands of people arriving in the EU over the last year to push Ankara to tighten border controls.

Europe received more than a million migrants last years. More than 84,000 have crossed its borders so far this year. Some member states, overwhelmed by the numbers and frustrated by their inability to agree on an effective European response, have begun tightening border controls or putting up fences without warning their neighbours.

Austria has announced that it will allow no more than 80 people a day to apply for asylum at its southern border points, as of today Friday.

EU Commissioner for migration Dimitris Avramopoulos warned that "Austria has a legal obligation to accept any asylum application that is made on its territory or at its border." He told the Austrian government in a letter that a ceiling on asylum-seekers "would be plainly incompatible with Austria's obligations" under EU and international law.

But Austrian Chancellor Werner Faymann seemed unfazed and said his country would only accept 37,500 applications this year as planned. Mr Faymann pointed out that Austria had more asylum applications last year than Italy and France, both of which are larger, more populated countries.

The new rift laid bare the frustration of nations destabilized by the arrival of so many people, and the lack of confidence that any timely, efficient European solution can be found. Belgian Prime Minister Charles Michel said the room was divided "between those we believe we can find solutions together and those who prefer to act alone. Everyone's asking themselves the question; what do we do when we've put things in place but they're not working?"

European Parliament President Martin Schulz pointed to selfishness and a lack of solidarity. "The problem is that everyone sees the situation from their individual standpoint and waits for the other to move first in implementing those necessary solutions," Schulz told the leaders. "Lamentably, this crisis is exposing serious fault-lines within our union."

Dutch Prime Minister Mark Rutte the result of actions like Austria’s could be "the bunching up of great amounts of people in difficult circumstances in northern Greece."

Greece has borne the brunt of the migration crisis, having received more than 850,000 people last year, mostly from Turkey. Thousands still enter every week. Its coast guard cannot cope and the country has barely 10,000 places to shelter those arriving.

The European Commission has given the country three months to restore order on its borders. Many believe Athens will not meet the deadline. The Commission fears that countries on the main migrant route north are working to close Macedonia's border with Greece.

Greek PM Alexis Tsipras appealed for the EU to remain united and show solidarity. "Europe cannot be rules for some and al la carte for others," he said.

The EU will persuade Turkey to deliver on its pledge to crack down on migrants crossing to Greece in the March Summit. The EU has offered Ankara 3 billion euros for the more than 2 million Syrian refugees on its territory, as well as easing visa rules for Turks and the fast-tracking of its EU membership process.

In the meantime the draft summit conclusions on migration say the main objective is to rapidly stem the flows, protect the EU’s external borders, reduce illegal migration and safeguard the integrity of the Schengen area.

The EU welcomed NATO’s decision to assist in reconnaissance, monitoring and surveillance of illegal crossings into the Aegean Sea.

It said the full and speedy implementation of the EU-Turkey Action Plan remains a priority, in order to stem migration flows and tackle traffickers and smuggling networks. “Flows arriving in Greece from Turkey remain much too high.”

The conclusions also speak of the ‘tailor-made packages’ being developed for third countries to ensure effective returns and readmission and call for more humanitarian assistance to Syrian refugees and to the countries neighbouring Syria.

The leaders called for an end to the ‘wave-through’ approach and to uncoordinated measures along the Western Balkans route. They also agreed on the importance to restore, in a concerted manner, the normal functioning of the Schengen area. “We need to get back to a situation where all members of the Schengen area apply fully the Schengen Borders Code and refuse entry at external borders to third-country nationals who do not satisfy the entry conditions or who have not made an asylum application despite having had the opportunity to do so.”

The identification and registration of migrants entering the EU is another priority. “The setting up and functioning of hotspots is gradually improving as regards identification, registration, fingerprinting and security checks on persons and travel documents. However, much remains to be done, in particular to make hotspots fully functional, to ensure the full 100% identification and registration of all entries, to fully implement the relocation process, to stem secondary flows of irregular migrants and asylum seekers and to provide the significant reception facilities needed to accommodate migrants under humane conditions while their situation is being clarified.”