The Dutch cabinet has reportedly collapsed after the coalition parties were unable to agree a deal to limit asylum seeker numbers.

Ministers have been holding talks for weeks to try to find ways of reducing pressure on the asylum system, but the prime minister, Mark Rutte, raised the stakes this week when he threatened to pull the VVD party out of the cabinet on the issue unless a deal was reached before the summer recess.

The VVD wanted to create a two-tier system for asylum seekers, with people under threat of persecution granted more rights than those fleeing war zones. It also said the number of family members who could join refugees in the second category should be capped at 200 per year.

But the party ran into opposition on the last point from the ChristenUnie, the smallest member of the four-way coalition, which was unwilling to break up families.

Broadcasters NOS and RTL said VVD asylum minister Eric van der Burg proposed a compromise by making the family reunification rule an “emergency brake” measure which would only be triggered if the Netherlands was at risk of being overwhelmed by refugees. But the ChristenUnie rejected this plan too.