Cameron: British EU exit is 'imaginable'

Although he commented that leaving the EU was "not a position I support," he added that "where we are unhappy with parts of the relationship we shouldn’t be frightened of standing up and saying so."

Cameron's remarks do not change his own stance, but they mark the first time that a UK Prime Minister has openly conceded the prospect of life outside the EU.

London Mayor Boris Johnson also recently commented that leaving the EU would "not be the end of the world," while education secretary Michael Gove and work and pensions secretary Iain Duncan-Smith are among a handful of cabinet ministers believed to be supportive of EU withdrawal

The Conservative leader is expected to outline his thinking on the UK's membership in a highly anticipated speech that has been delayed since autumn and is now expected in January.

Although he again ruled out the prospect of an "in/out' referendum in his Commons statement, Cameron is expected to unveil plans to claim exemptions from EU employment and social policy and safeguards for the City of London, followed by a referendum on the new EU terms.

At his post-summit press briefing last Friday (14 December) he told reporters that the prospect of deeper integration of the EU countries in the eurozone also offers the UK an opportunity to re-write the terms of its own membership.

In addition to its opt-out from the euro and the Schengen passport-free area, the UK indicated its intention to opt out of EU policy on justice and home affairs in October.

However, renegotiation of the UK's membership would require the agreement of the 26 other EU countries.

For his part, French President Francois Hollande vowed to oppose any repatriation of powers, commenting that "when a country commits it is for life." He also dismissed the idea of "a Europe a la carte."

The Conservative leader is under intense pressure from his own party to call a referendum on Europe.

Surveys carried out by the ConservativeHome website, popular among thousands of party activists, indicate that a majority of Conservative supporters would vote for UK withdrawal.

Meanwhile, the Conservatives are becoming more and more concerned about a surge in support for the UK independence party, which finished second to Labour in two parliamentary by-elections in November.

Although the anti-EU party has never won a seat in the House of Commons, recent opinion polls have Nigel Farage's party set to claim over 10 percent of a future vote, with the biggest chunk of its support base coming from ex-Conservative voters.