Brussels, Sep 24 (IANS): Leaders of the European Union (EU) on Thursday agreed to provide 1 billion euros ($1.12 billion) to countries battling a major refugee crisis and to tighten border controls.

The agreement came about after a seven-hour summit among the bloc's 28 members, Xinhua news agency reported.

The funding will help refugees from the Middle East.

There are eight million displaced people in Syria, while about four million have fled the country. The ever increasing number of refugees trying to enter the European countries is weighing on the EU.

"We should be talking about millions of potential refugees... It is clear that the greatest tide of refugees and migrants is yet to come," European Council President Donald Tusk said.

On Tuesday, EU members approved a proposal to relocate 120,000 migrants.

Countries including Germany and Hungary have imposed border controls to stem the refugee influx, creating chaos and putting the bloc's passport-free policy under threat.

Tusk urged "proper management and control" of the EU's external borders.

As part of the efforts to ease the pressure on frontline states, EU leaders agreed at the summit to set up refugee reception centres by the end of November.