LONDON (Reuters) - Britain's renegotiation of its EU ties risks starting a chain of events that could lead to the 28-nation bloc's paralysis or disintegration, politicians and analysts said on Wednesday.
German, French, Irish and Italian participants in a "war game" simulating the process said British attempts to repatriate powers would open Pandora's Box, with other EU nations jockeying to win concessions and appeal to voters swayed by the rise of eurosceptic parties.
Renegotiating Britain's place in Europe before an in/out referendum will be one of Prime Minister David Cameron's central policies in his campaign for re-election in 2015.
Former Irish prime minister John Bruton said a proposal by members of Cameron's Conservative Party for a new "red card" to allow members to block EU laws would paralyse decision-making.
"Does it (Britain) want the European Union to continue - whether it is in it or not - as a workable entity that has the capacity to make decisions reasonably efficiently," said Bruton, who served as EU ambassador to the United States. "Or does it want the European Union essentially to wither away?"
The event was organised by Open Europe, a eurosceptic think tank funded by business leaders which campaigns for a "slimmed down" EU that focused on free trade.
Based on the sort of "war game" used by military planners and companies to prepare for big events, organisers asked politicians and commentators to take on the role of European governments to discuss the British reforms.
The second part considered the fallout from a vote to leave the EU.
British lawmaker Andrea Leadsom, a member of Cameron's Conservatives and a campaigner for EU reform, said Britain wanted to see powers moved from the EU to national parliaments.
Britain wants to opt out of some EU-wide laws on justice, social and employment laws, open the bloc's single market to trade in services as well as goods and reform the rules on agriculture and fisheries, she said.
"The European Union is standing like the Roman Empire in its dying days. It is becoming incredibly complacent. We have to change things," she said.
Her party is under pressure to respond to the rise of the UK Independence Party, which wants to leave the EU.
Sitting around a boardroom table surrounded by posters of British symbols such as the red London bus and Big Ben, one speaker representing Italy said Britain's exit from the EU could lead to the bloc's collapse.
"We are worried that renegotiating is only the first step towards the breaking up of Europe," said Lucio Caracciolo, an Italian political commentator. "It's about the disintegration of Europe."
Giving Britain a new EU role would lead to other countries demanding special treatment, the panel heard.
"We are afraid this would open up Pandora's Box. Other governments would put things on the table because they are also under pressure, often from right-wing or eurosceptic anti-EU parties," said Ulrich Speck, a German commentator.
Any changes to the treaties on which the EU is founded could be blocked in national referendums, he added.
If Britain votes to leave the EU in a referendum Cameron hopes to hold in 2017, Ireland's Bruton said Britain's economy would suffer as banks relocate to Europe and it has to pay for access to the EU single market. There would be no return, he said.
"Britain is on its own. Everybody will lose."
(Editing by Angus MacSwan)