Prime Minister David Cameron on Monday defended his plans for EU reforms in front of Britain's business leaders, as a top executive warned against "shutting ourselves off from the world".
Cameron also used a speech to the annual conference of the CBI business lobby group to reject suggestions that his promise of an in-or-out referendum in 2017 was causing uncertainty that could hurt the economy.
"Britain's future in Europe matters to our country and it isn't working properly at the moment and that is why we need to make changes," he said.
Four out of five British businesses are in favour of staying in the European Union, according to the Confederation of British Industry, which estimates the net benefits of EU membership to the UK as between four and five percent of GDP.
But Cameron's Conservative-led government is becoming increasingly hawkish in its dealings with Brussels, raising concerns that Britain could be heading towards the exit.CBI president Mike Rake, who is also chairman of telecoms giant BT, told delegates in London that membership of the EU was "overwhelmingly in our national interest".
And he warned Britain faced a choice between two futures.
"One, in which we risk looking inward, shutting ourselves off from the world in the face of inevitable global change and where we reject the power of free and competitive markets to drive progress," he said.
"The other, in which we embrace the openness which has always been the foundation of Britain's success -- to trade, to people, to investment and to ideas from abroad, and of competitive markets at home."
Delegates at the conference expressed frustration with the tone of the political debate, particularly its focus on immigration from other parts of Europe.
While politicians increasingly vie to promise curbs on new arrivals, many businesses see immigration as a vital way of filling a skills gap in Britain.
- 'Conveyor belt towards exit' -
Opposition Labour leader Ed Miliband, who has refused to match Cameron's referendum promise, warned that leaving the EU would be a "disaster" and put profits and jobs at risk.
In his address to the conference, Miliband accused those who "flirt" with the idea of an exit of weakening Britain's influence in Brussels."Making ever-more incoherent demands, ever-more isolated from its partners -- all this puts us on the conveyor belt towards exit with no idea how to get off," he said.
Hamish Macleod, the director of public affairs at BSW Timber, the largest sawmilling business in Britain, told AFP that leaving the EU would "concern us greatly".
The company has a mill in Latvia and does a lot of business in the EU.
But Macleod acknowledged that persuading the public of the benefits was "going to be a very, very hard political sell" given the current climate of debate.
Francesca Brosan, chairwoman of digital communications firm Omobono, highlighted the importance of the EU in negotiating a trade deal with the United States.
"We do a lot of work with the US, so obviously the more we can open that trade channel, the better," she said. "Maybe we wouldn't have quite the power as just the UK."