Turkish Prime Minister Binali Yildirim has warned that Europe risks facing a "huge regional" refugee problem if a deal with Turkey to stem the flow of migrants collapses, the Associated Press reports.

Turkey is demanding that the European Union ease visa restrictions for Turkish citizens and has threatened not to implement an agreement with the EU to take back refugees. Turkey is also demanding that the EU deliver promised funds to help Turkey improve conditions for close to 3 million Syrian refugees.

Yildirim said if the visa-waver deal and the agreement for the refugee's return are not implemented, "the refugee issue will not remain within Turkey's borders, it risks turning into a huge regional problem that will concern the whole of Europe."

Plans to loosen visa restrictions have run into trouble over Turkey's refusal to amend its anti-terror laws at a time when it is fighting heightened threats from the Kurdish rebels and the Islamic State group.

Yildirim was speaking in Istanbul during a joint news conference with his visiting Bulgarian counterpart.