Australia could face a diplomatic stoush with the United Kingdom if it pushes ahead with a potential plan to force British backpackers to work in regional areas under a looming overhaul over Australia's migration system.British citizens on Working Holiday Maker, or backpacker, visas are allowed to live in Australia for up to three years without any specific work requirements under a free trade deal which came into force in 2023.Working holiday makers from all other countries must work in regional or remote areas to have their visas extended beyond a year.The favourable treatment has led to a steep increase in the number of UK backpackers coming to Australia, up from 47,238 in 2023/24 to 79,412 in 2024/25 according to Home Affairs data.Under pressure to clamp down on temporary visas and reduce overseas arrivals, Labor is understood to be considering imposing regional work requirements on British backpackers to make the scheme less attractive.Despite warnings that the change could constitute a breach of the free trade agreement (FTA) it has not been ruled out internally, according to two sources within government. Aware of the discussions taking place, UK Home Secretary Shabana Mahmood was expected to raise the issue with Home Affairs Minister Tony Burke on the sidelines of a Five Eyes meeting in Sydney today.Following that meeting Mr Burke did not deny the issue had been canvassed."We talk regularly about all migration issues, about the issues we are managing in each of our countries," Mr Burke told reporters in Sydney."In terms of anything coming forward, as to any changes we'd made to the migration program, those are decisions that would be made by the Australian cabinet."The possible change to UK arrangements is one of several under consideration as part of a wider crackdown on immigration which Mr Burke was due to announce three weeks ago before being forced to postpone.No new date has been set for the policy announcement, which is designed to ensure Labor meets its own target of cutting net overseas migration (NOM) from the current 300,000 to 225,000 by 2028.Backpackers are a significant contributor to the NOM with a record 321,116 visas being issued last year, up from 234,556 the year before.Mr Burke last month paused the processing of applications from 24 countries including Argentina, Chile, Spain, Poland, Thailand and Malaysia, and pushed workers applying for overseas skilled visas to the back of the queue."The processing of backpacker visas across the entire program is happening more slowly than it was," Mr Burke said."And similarly there are changes we've made to the permanent program in preferencing, at the moment, onshore positions rather than offshore."The far-reaching directive is designed to stop, or dramatically slow, the number of overseas arrivals but has created an enormous amount of confusion and concern within the business, hospitality and tourism sectors which rely on migrant workers.As one business figure told the ABC, "everything has ground to a halt".One Nation and the Coalition are promising dramatic cuts to migration, but both have ruled out any cuts to backpacker visas given their popularity in regional areas.