"Britain has got to be a part of the biggest political union, largest business market in the world, that's right on our doorstep," Tony Blair has told ITV News.
He said David Cameron's referendum pledge was "driven more by [the] internal Conservative party problem on Europe, which I'm afraid is back with us now, and UKIP."
He told Economics Editor Richard Edgar that eurosceptics on the right of the Conservative party and in Ukip "are never going to be satisfied."
"There is nothing that he [Cameron] is going to do that will placate those people."
To the surprise of many Lib Dems, Nick Clegg appears to have played down the importance of the Coalition's divide on an in-out referendum.
Business leaders in Davos are worried about the Prime Minister's pledge to put Britain's membership of the European Union to a referendum.
With some in France keen to "roll out the red carpet" for a British exit, Germans favouring decentralisation welcome EU renegotiation talks.