Lord Tebbit serves PM an unpalatable dish

David Cameron warned of backbench revolt if he does not offer the 'red meat' of significant power shift from the EU

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David Cameron was yesterday warned that he faces a "torrent" of Conservative voters and activists deserting his party unless he demands significant powers back from Brussels when he finally makes his speech on the future of Britain's relationship with Europe.

With the hostage crisis in Algeria all but over, the Prime Minister is expected to give his delayed speech as early as tomorrow. He is expected to use it to promise voters a referendum on the EU, after a renegotiation of powers.

Eurosceptic backbenchers claimed last night that they had been reassured by Mr Cameron, in talks in Westminster last week, that he would offer a specific, fresh British opt-out from EU powers in his long-awaited speech. The Prime Minister is expected to offer "red meat" to disgruntled Tories, who have put forward a shopping list of demands. Yet it was unclear whether this would involve a specific opt-out from EU treaties or powers, or merely involve tough language. A referendum, based on a renegotiation, would come during the next Parliament, most likely in 2018.

Mr Cameron was due to deliver the speech in Amsterdam last Friday but was forced to delay because of the situation in Algeria. According to extracts, the PM will declare that Britain could drift towards the EU exit door unless problems with the the UK's relationship with Brussels are addressed. No 10 sources said the speech would be this week.

Yet, writing on his blog on the Telegraph website yesterday, former Conservative Party chairman Lord Tebbit said the "likely result in the case of the great speech to set out policy towards the EU is all too likely to be yet another muddle".

He added: "If the Prime Minister does not call for the repatriation of significant powers to the Government here in Westminster, the stream of Tory voters and activists giving up on the Conservative Party will become a torrent.

"If he does, the Brussels elite, the Germans, French and all the rest, will make it plain that there cannot be an à la carte menu for Britain while they all have to accept the chef's federalist dish of the day, day after day, day after day. In short he will have designed for himself a policy cul de sac."

In telephone talks on Thursday evening, President Obama warned Mr Cameron not to leave the EU. And yesterday the US reiterated its desire for Britain to remain at the heart of Europe.

US Defense Secretary Leon Panetta told Radio 4's Today programme: "The British role [in Europe] is absolutely essential to the transatlantic alliance. What we built in Nato has been extremely important to provide security in this part of the world. Britain as to be a very important partner in that effort.

"We rely a great deal on that partnership in order to ensure security in this region."

Mr Cameron will say: "If we don't address these challenges, the danger is that Europe will fail and the British people will drift towards the exit.

"I do not want that to happen. I want the European Union to be a success and I want a relationship between Britain and the EU that keeps us in it."