By Peter Griffiths

LONDON (Reuters) - Prime Minister David Cameron's promise to reform Britain's relations with the European Union is an ill-fated attempt to unite his party that could lead to the "economic suicide" of leaving the bloc, his coalition partner said on Tuesday.

Deputy Premier Nick Clegg, leader of the Lib Dems, the pro-EU party that shares power with Cameron's larger Conservatives, accused him of starting a chain reaction that could lead to Britain tumbling out of the EU.

Intensifying the rhetoric on an issue that divides the coalition and threatens Cameron's chances of re-election in 2015, Clegg said the EU policy was bound to unravel and would never appease Conservative Eurosceptics.

"It is a short-sighted political calculation that could jeopardise the long-term national interest," Clegg said in a speech on Britain's role in Europe. "It is playing with fire and, if we go down this track, it is Britain that will get burned."

Cameron upset European allies in January when he promised to negotiate a new EU deal for Britain and hold a referendum on EU membership by the end of 2017. He plans to claw back powers in areas such as policing, employment rights and social policy.

His rivals said it was a gamble forced on him by Conservative splits over Europe and the rise of the UK Independence Party, which wants to leave the EU.

Business for Britain, a lobby group that wants to renegotiate the country's EU ties, accused Clegg of scaremongering and undermining the chances of securing a new relationship that would appeal to British voters.

"By writing off the process of renegotiation before it has even properly begun, Nick Clegg is increasing the likelihood of Britain voting to leave," said Matthew Elliott, the group's chief executive.

Clegg, whose popularity and that of his party has slumped since the coalition was formed in 2010, criticised those in Britain who see Europe as a "sinister super-bureaucracy".

Opponents of the EU see it as a threat to Britain's sovereignty and argue that London would save billions in membership fees and be free to forge new trade links if it left.

Clegg said leaving Britain's biggest trading partner would wreck the economic recovery. Membership of the 28-nation bloc gives Britain access to a single market of 500 million people and more than 50 trade deals around the world.

It also helps to attract investment from non-EU countries that see Britain as a springboard to Europe, Clegg said.

And he called on organisations that want to stay in Europe to make their case more forcefully.

"Leaving the EU would be economic suicide. (It) would throw our recovery away."

Clegg, who once described the pledge to repatriate powers as a "false promise wrapped up in a Union Jack", ceded some ground to Cameron, accepting that Britain should be able to "cobble together a package of reforms" with Germany and others.

(Editing by Angus MacSwan)

 

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