David Cameron, the British prime minister, has promised to give the Brish people a straight referendum choice on whether to stay in the European Union or leave, provided he wins an election in 2015.
"It is time for the British people to have their say. It is time for us to settle this question about Britain and Europe," the British prime minister said on Wednesday.
"When we have negotiated that new settlement, we will give the British people a referendum with a very simple in or out choice to stay in the EU on these new terms; or come out altogether," added the Tory leader. "It will be an in-out referendum."
Cameron ended months of speculation by announcing in a speech the plan for a vote sometime between 2015 and 2018, shrugging off warnings that this could imperil Britain's diplomatic and economic prospects and alienate its allies.
His Conservative Party would campaign for the 2015 election promising to renegotiate Britain's EU membership.
Cameron said he would prefer Britain, the world's sixth biggest economy, to remain inside the 27-nation EU, but he also made it clear he believes the EU must be radically reformed.
A new EU must be built upon five principles, he said: competitiveness, flexibility, power flowing back to - not just away from - member states, democratic accountability and fairness.
The eurozone debt crisis is a main reason why Britain must reassess its relationship with the wider EU, Cameron said, adding that ever closer union was not Britain's objective.
He said Britain did not want to pull up the drawbridge and retreat from the world, but that public disillusionment with the EU was at "an all-time high".
He also said that avoiding a referendum would make an eventual British exit from the EU more probable.
'Holding it hostage'
Al Jazeera’s Laurence Lee reporting from London, said: "What he [Cameron] has done in this speech is give the European Union a deadline, almost as if he's holding it hostage, and saying if you don't change in these terms, then we will have a referendum and the British people will decide if we stay in or not."
"The EU could start to collapse from the outside from its most sceptical parts, and that's why we're already getting reactions from countries like France saying that this speech is dangerous. In Berlin they will be saying exactly the same thing."
However, the possibility of this referendum is uncertain, as his conservative party's chances to win the 2015 election are slim.
The Tories trail the opposition Labour party in opinion polls, and the coalition government is pushing through painful public spending cuts to try to reduce Britain's large budget deficit, which is likely to upset voters in the meantime.
His speech in London is also likely to raise concerns in the United States, a close ally, which has said it wants Britain to remain inside the EU with "a strong voice".