Former Prime Minister Tony Blair has criticised David Cameron for putting the prospect of Britain leaving the EU on the agenda.
He told Sky News: "Europe does need Britain and Britain needs Europe, which is why the sensible thing to do is to argue the case for reform in Europe.
"But the issue for me is why put that other question, why say we are actually going to put on the agenda the prospect of leaving altogether?
He went on: "Why would we do that? Why would we do that now when we don't know either what we are proposing, what the rest of Europe's proposing or what the outcome of these negotiations is going to be?"
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.