Former environment secretary Owen Paterson has said the PM has to act now rather than putting off any renegotiated membership until after the 2015 election.
Mr Paterson, seen as a standard bearer for the Tory right since he was kicked out of the Cabinet earlier this year, said sending a strong message to the European Union was the best way to avoid the UK remaining in an increasing political union.
Triggering article 50 of the Lisbon Treaty - activating the two-year mechanism for departure - would mean other nations were “legally bound” to enter into meaningful negotiations before the planned in/out referendum in 2017.
Pat McFadden, Labour’s Shadow Europe Minister, said the Article 50 suggestion was the equivalent of “handing in your resignation notice. It’s not a negotiating tactic. It is a notice to quit. “
“What is remarkable about the debate in the Conservative Party over Europe is that they think this kind of speculation about the UK leaving Europe is costless, but it isn’t. It places a huge question mark over British jobs, rights at work, investment and our place in the world.”
Mr Paterson told a central London audience gathered to hear his speech that the Eurozone had “already embarked upon a path that we can never follow” and insisted Britain could quit the EU and successfully remain part of the Single Market.
The euro has turned the EU “into an unhappy land of semi-permanent recession” and triggering article 50 would be “enormously attractive to uncommitted voters”.
He said: “In short, it is not so much that we are leaving the EU, as much as the political project of the EU has left us.”
“You trigger this, we’ve got an election coming up in May, we have this in the manifesto, you have two years clear and you are bang on target to have a referendum in 2017 in which the British people have a really clear choice,” he added.
“That really would be the proper choice because by then you would have negotiated the market option... or the choice is very clear, you go full bore for this political entity in which we are completely subsumed and we have to join the euro.”
He said the short timescale for Britain to extract itself from the current set-up means it needs a “proven, off-the-shelf plan” and backed the “Norway option”. The Scandinavian country is a member of the European Economic Area, which allows it to be part of the Single Market.
Critics claim the EEA leaves its members bound by Brussels regulations without any ability to influence how they are drawn up but Mr Paterson insisted the EU is now often a “substation” that simply passes on new regulations that are drafted at an international level.
Britain, unlike Norway, has no individual representation at these higher level discussions because it is a member of the EU, he added.
Mr Paterson said it would be “very hard to get a big negotiation through by 2017” and voters must be given a “clear democratic choice” ahead of the 2015 General Election.
He said: “I think a very significant number of the present parliament share that view and I can assure you that I’ve spoken in well over 50 seats in the past couple of years, very significant numbers, the overwhelming proportion of members in the country share our views.”