London mayor Boris Johnson will say that life outside the "sclerotic" European Union is an "attractive" option for Britain.
Mr Johnson will stress that remaining in a streamlined EU remains the best option however he will also say the UK should not fear leaving the group if it cannot secure necessary reforms.
A looser association with the EU could boost trade with the rest of the world and add 1.1% to GDP, he will say.
Mr Johnson will also endorse an eight-point plan for reforming the group, going beyond the goals set out by David Cameron ahead of a possible in-out referendum in 2017.
The move has reignited speculation the London mayor is wooing Eurosceptics with a view to a future Tory leadership bid.