David Cameron is seeking to head off a major row over the future of the UK in Europe at the Conservative party conference by signalling he is going to make a major speech on the issue later this year.
Some uncertainty remains over what approach the prime minister will take, particularly how far he will go to appease the strongly Eurosceptic wing of his party, many of whom want a referendum on UK membership of the EU.
Cameron, who has so far opposed an in/out referendum, met further difficulties on the issue on Thuirsday on Thursday when quotes emerged from a speech by Nick Clegg, in which the deputy prime minister called opponents of close ties with Europe "insular, chauvinistic and, in my view, shortsighted".
A report from Bloomberg news agency suggested the PM would back his deputy by making a strong case for Europe in his speech, expected to be delivered before a major European council meeting in Brussels in December.
But in an interview in Brazil, where he is promoting British trade, Cameron appeared to take a different line to his coalition partner. Cameron said: "I believe that Britain should be in the EU"because it was "vital for our national interest".
He said current negotiations for the 17 members of the EU in the euro currency zone to form closer economic and political ties would give Britain the "opportunity to reshape Britain's membership of the EU in ways that advance our national interest in free trade, open markets and co-operation".
He added: "I think that means less Europe not more Europe, less cost, less bureaucracy and less regulation."
Cameron's latest comments echo an article he wrote for the Sunday Telegraph in June, in which he held out the prospect of a less confrontational EU referendum and vowed to "make changes" to the EU relationship.
He claimed then that "swaths of legislation" could be scrapped in areas such as social issues, working time directives and home affairs.
Cameron said the cost of EU membership was too high and announced a government-wide audit of the costs and benefits.
Speaking after a private business dinner at the Liberal Democrat conference in Brighton on Monday, Clegg predicted questions over Europe "will bedevil British politics in wholly unpredictable ways" in the coming months.
He cited arguments about the EU budget or the proposed banking union as possible "catalysts" for a dispute.
He continued: "The channel [between England and mainland Europe] is going to get wider: we're not part of the eurozone, we're not part of these central decisions over a new concept, a new federal arrangement in the eurozone.
"My fear is that that act of further political and economic integration will set off a chain reaction, particularly in the UK, which may lead some voices in politics, parts perhaps even of the business community, and certainly large parts of the press, to demand that in reaction, just as the eurozone is sorting itself out, we should somehow try to pull ourselves further and further away."
However, in a sign of the difficulties facing the PM at his annual conference in two weeks' time, Tory Eurosceptic MP Mark Reckless responded: "David Cameron can't finesse the EU debate with a clever formula, as anything less than a clear commitment to an in/out referendum now will just push support to Ukip."
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