LONDON: Prime Minister David Cameron on Wednesday promised to hold a referendum by 2017 giving British people the choice of staying in or leaving the European Union if his party wins the next election.

Cameron said in a long-awaited speech he wants to renegotiate the terms of Britain's EU membership and “when we have negotiated that new settlement, we will give the British people a referendum with a very simple in-or-out choice”.

Britain's new relationship with the EU must be one “with the single market at its heart”, Cameron said.

And he warned that if the EU failed to bring in the reforms that he wanted, Britain could “drift” out of the 27-member bloc.

Citing the problems of the eurozone and “a crisis of European competitiveness”, Cameron said: “If we don't address these challenges, the danger is that Europe will fail and the British people will drift towards the exit.”