LONDON (Reuters) - A majority of British firms say they would vote to turn their back on the European Union unless Britain can reform its relationship with the bloc, a survey said on Monday.
Conservative Prime Minister David Cameron has pledged to demand reforms within the EU if he is re-elected next year. He also has promised to put those reforms to a public test by holding a referendum on the country's membership of the EU by 2017.
Britain's other main parties, Labour and the Lib Dems, also say they back EU reform. But they are opposed to re-drafting the bloc's treaties and against holding a referendum unless there is a major shift in the balance of power between London and the EU.
Sixty percent of companies polled by the Institute of Directors business group said they would only vote to stay in the EU if the government could negotiate changes. Of that 60 percent, more than half wanted to see a substantial repatriation of powers through treaty change rather than minor reforms.
British business lobbies are divided on the merits of holding a referendum on Europe. The Confederation of British Industry, another business group, says EU reforms are necessary but Britain should stay in the bloc.
Earlier on Monday Britain's higher education industry warned that leaving the EU would damage the British economy, joining voices from the banking, carmaking and other manufacturing industries in expressing concern.
Monday's poll showed 54 percent of the 1,432 businesses surveyed backed Cameron's referendum plan. The organisation warned, however, that political wrangling over whether to hold a vote should not be allowed to overshadow the push for reform.
"We want to see a discussion now about how the EU needs to change, not an all-consuming debate on In v Out," said IoD Director General Simon Walker. "Business needs to see the reform agenda put first, not pushed to the side-lines by the fringe elements of this debate."
The debate over Britain's future in Europe has been energised by the emergence of the UK Independence Party (UKIP), which campaigns for immediate withdrawal from the EU. UKIP could win European elections being held later this week and hopes to take its first seat in the British parliament next year.
Support for Britain staying in the EU in all circumstances stood at 31 percent in the IOD poll. Only 6 percent called for withdrawal regardless of any reforms. Companies highlighted EU legislation on working hours, temporary workers and parental rights as the areas that caused them the most problems.
Editing by Larry King