EU referendum: Businesses urge 'special deal' for UK

David Cameron should push for Britain to leave the EU unless other leaders agree to a "special deal" for the UK, a business lobby group says.

Business for Britain's demands include giving member states control over migration levels and employment laws, a "veto" for national parliaments and protection for the City of London.

The group campaigns for "fundamental changes" in the UK's EU membership.

Mr Cameron has promised to renegotiate ahead of an in/out referendum by 2017.

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He has said he rules nothing out if his demands, which include curbs on EU migrants' welfare entitlement, are refused, and has been lobbying his European counterparts in recent weeks ahead of a summit this week.

Business for Britain said the EU debate would "utterly dominate" politics over the next year but said there was a "remarkable lack of clarity" on key issues including the renegotiation process.

'Unwanted philosophy'

In a 1,000-page report, called 'Change, or go', serialised in the Daily Telegraph, it said there was "widespread recognition" of the need for a "special deal" for the UK, and that it should vote to leave if the EU is "intransigent" to this.

The report's authors include former executive chairman of PA Consulting Group John Moynihan and the founder of online retail business JML John Mills.

Setting out the reforms they see as essential for a Yes vote to remain in, they say the EU must have exempted Britain from the commitment to an "ever-closer union" set out in the 1957 Treaty of Rome, describing this as an "unwanted philosophy".

In contrast to Foreign Secretary Philip Hammond who said a "red card" national veto system was not possible, the report says such a policy "must have been reintroduced" by the time of the referendum.

It also says the principle of free movement of people, which a number of EU leaders say cannot be altered, should be renamed the "free movement of workers".

EU laws regulating business have become "all-pervasive" and must be reduced, it says, and control over social and employment laws, which have had a "particularly burdensome" impact on the UK, should be returned to national parliaments.

'Tinkering'

The report also calls for protections for countries that are outside the eurozone, and a "permanent, lasting reduction in the EU Budget".

Warning that "tinkering around the edges" would not be good enough, Business for Britain says remaining in the EU on the current terms "represents the worst of all worlds".

Business for Britain says it speaks for the "large, but often silent, majority" of businesses in calling for fundamental EU reform.

The Confederation of British Industry has said business should "speak out early" in favour of staying in, which it says is clearly in the national interest.

The British Chambers of Commerce has called for a vote in 2016 to end uncertainty.

Business for Britain's report comes after some Conservative MPs criticised Downing Street's approach to the EU referendum campaign, with 27 rebelling against the government in a Commons vote over a pre-election "purdah" period.

Meanwhile, seven Eurosceptic MPs from three parties have formed a group to act as a precursor to the Out campaign, and on Sunday former Defence Secretary Liam Fox said the Conservative Party should not use any of its money to back the campaign to stay in the European Union.