Liam Fox: 'life outside the EU holds no terror'

Former defence secretary Liam Fox will today set out his staunchly eurosceptic credentials when he declares that "life outside the EU holds no terror".

It follows the Prime Minister reassuring eurosceptics that he is prepared to hold an EU referendum.

In a speech, the Tory MP will say:

I would like to see Britain negotiate a new relationship on the basis that, if we achieved it and our future relationship was economic rather than political, we would advocate acceptance in a referendum of this new dynamic.

If, on the other hand, others would not accede to our requests for a rebalancing in the light of the response to the euro crisis, then we would recommend rejection and potential departure from the EU.