* UK Pro-Europeans to form new campaign group
* PM Cameron tours Europe in search of concessions
* Britain to hold in-out referendum by end of 2017
By Guy Faulconbridge and Kate Holton
LONDON, May 28 (Reuters) - Supporters of Britain’s membership of the European Union will create a new group shortly to run the “Yes” campaign for a referendum Prime Minister David Cameron has promised by the end of 2017, four sources familiar with the plan told Reuters.
The new group aims to focus the efforts of disparate pro-Europeans who fear a British exit from the 28-nation bloc it joined in 1973 would diminish London’s clout, hammer the world’s fifth largest economy and trigger a new crisis in the EU.
Cameron, whose Conservative party won a surprise majority in the May 7 election, has promised to renegotiate Britain’s EU relationship. Some campaigners expect the referendum well before his self-imposed deadline, possibly next year.
“A new organisation to bring together the ”Yes“ campaign will be launched in the very near future,” said a senior member of the group who spoke on condition of anonymity as the plans have yet to be formally announced.
“This will be the foundation of the ”Yes“ campaign,” said the source, declining to address its leadership or financing.
A second source said the “In” campaign would be kept at arm’s length from the Cameron government to enable it to garner cross-party and popular support.
The sources differed on the countdown to an announcement, with some citing weeks and others months.
A third person involved in the project said the group would be unveiled soon because “the landscape is changing quite fast”, but the exact timing depended on the progress of Cameron’s talks with other EU leaders.
A fourth source said it would be created within months but the leadership of the organisation had yet to be decided. Many pro-European British politicians tend to be of the older generation and the “Yes” camp so far lacks an charismatic, consensual figure with broad public appeal.
Cameron, whose preference is to stay in a reformed European Union, has said the relationship is not working in Britain’s interest and that it would not break his heart to leave the EU.
“YES OR NO?”
The prime minister began a tour of European capitals in The Hague on Thursday, meeting Dutch Prime Minister Mark Rutte. He will also visit Polish Prime Minister Ewa Kopacz, French President Francois Hollande and German Chancellor Angela Merkel to discuss Britain’s demands.
Cameron will set out his reform proposals in more detail at an EU summit on June 25-26.
Asked about the embryonic domestic campaign, a spokesman for Cameron would only say: “The prime minister is working on the renegotiation and is confident of being successful in that.”
British voters will be asked to answer “Yes” or “No” to the question: “Should the United Kingdom remain a member of the European Union?”
Opinion polls show voters are divided. A YouGov poll on May 3-4 found 45 percent would vote to stay in, 33 percent would vote to leave and 18 percent did not know how they would vote.
After two bruising campaigns in the last 12 months in which pollsters failed to predict a volatile public mood accurately, there is concern among pro-Europeans about the messaging of the “Yes” campaign.
Some fear voters could reject a pro-European message pitched mostly by the London establishment, big business and bankers, discredited in the eyes of voters since the financial crisis.
Pro-Europeans have studied closely the mistakes of the 2014 Scottish referendum campaign. Though unionists ultimately prevailed over separatists, their campaign was riven by internal divisions, lumbered with having to convince people to vote “No”, and often appeared to lack passion.
“This will not be bankers and politicians speaking down to British voters,” said one of the pro-European organisers. “This aim is to explain what the European Union is all about, to show its strengths, its benefits for ordinary voters.”
Still, the group has yet to find a leader who could reach millions of voters across the United Kingdom.
It is expected to draw on the expertise of the European Movement chaired by former lawmaker Laura Sandys, British Influence headed by Peter Wilding and Business For New Europe headed by public relations supremo Roland Rudd.
“BETTER OFF IN?”
The risk of Britain leaving the EU, known as a “Brexit”, has spooked investors, company bosses and Britain’s military allies.
They caution that quitting the world’s biggest trading bloc would isolate the $2.8 trillion economy, undermine London’s position as the only financial centre to rival New York and hang a “closed for business” sign over UK PLC - a term encapsulating Britain’s attraction as a business location.
Many chief executives say they support reform of the EU to reduce costly regulation, but that changes are best sought from within the club rather than by threatening to drop out.
Pro-Europeans say a Brexit would scupper the close alliance with the United States and banish Britain from the top table of world affairs. Washington has repeatedly made clear its strong preference for London to stay in the EU.
Opponents such as charismatic UK Independence Party leader Nigel Farage, say Cameron will fail to win serious changes and Britain would do better to walk away from a stagnant EU economy strangled by red tape and an antiquated welfare system.
Some also argue that since Britain has refused to join the euro currency, it will be left out of the political integration of a core Europe being driven by Germany and France.
Since Farage failed to win a seat in the general election, UKIP has been convulsed by conflict over whether he should stay on as leader and spearhead the “Out” campaign.
In 1975, British voters decided 67-33 percent to stay in the European Economic Community, the precursor to the EU. (Editing by Paul Taylor)