David Cameron held out the prospect of a referendum on Britain's relationship with the European Union today - but only when it has been "fundamentally" changed.

The Prime Minister dismissed the idea of an immediate in/out referendum, insisting that would be putting a "false choice" in front of voters.

But he said he is "not against a referendum" altogether and is in favour of one "in some cases".

"The principle, I think, should be this: if you are fundamentally changing the relationship between Britain and Europe, then you should be having a referendum," he told BBC Radio 4's Today programme.

Asked whether it should be a straightforward question of in or out, Cameron said he would set out more detail in a highly-anticipated speech on the subject he is due to deliver in the Netherlands this month.

"You will have to wait for the speech for the full details but obviously I want to give people a proper choice," he said.

"What I don't favour, I think if we had an in/out referendum tomorrow or very shortly I don't think that would be the right answer, for the simple reason I think we would be giving people a false choice, because right now there are a lot of people who are saying I would like to be in Europe but I'm not happy with every aspect of the relationship so I want to change.

"That is my view, so I think an in/out referendum is a false choice."

Amid claims from some in his party that it might be in Britain's interests to leave the EU, the Prime Minister said: "I'm in favour of our membership of the European Union and I'm optimistic and confident that we can achieve changes in the European Union to make sure that Britain feels more comfortable with our relationship with Europe.

"I'm confident we can do that."

The Prime Minister dismissed warnings that question marks over Britain's position in the EU are damaging for business, insisting that the debate is unavoidable.

"Europe is changing and the opportunity for us to lead those changes and make changes that make our relationship with Europe more comfortable, I think, are absolutely there, so I'm confident we can do that and then, as I say, a fresh settlement, and then fresh consent for that settlement, I think that's the right approach," he said.

"Those who say this is very dangerous, you are putting at risk the relationship with Europe, you are putting at risk our position with regard to business, I don't agree with that, because this debate is happening anyway."

Peter Kellner: Britain, Europe and the Fear Factor

His comments came as Communities Secretary Eric Pickles became the second Cabinet minister in recent days to raise the prospect of Britain leaving the European Union.

Amid deepening divisions in the Conservative Party over the issue, Pickles said the UK should not remain a member "at any price".

"If it's in our clear national interest that we should remain in the European Union - and I sincerely hope that is the case - then we should stay, but we shouldn't stay at any price," he told BBC Radio Five Live.

His intervention echoed that of Chancellor George Osborne, who said last week that the EU "must change" if Britain is to remain a member of the EU.

Asked about the Chancellor's comments today, Cameron said he agreed with Osborne. "Yes, I think it does need to change, and it is changing."

The Prime Minister said his speech, which has been expected for several months amid growing speculation about his stance on the EU, was "finished and ready to go".

Cameron is caught in the middle of an increasingly ill-tempered row over the issue as some in his party warn that leaving the EU would be highly damaging.

Cabinet minister Ken Clarke is to share a platform with Labour peer Lord Mandelson later this month to stress the benefits of remaining in the union.

The pair are launching a new cross-party organisation, the Centre for British Influence through Europe (CBIE), to make the "patriotic" case for British engagement.

And around 20 Tory MPs have also apparently signed a letter, due to be published this week, warning of "massive damage" if the UK leaves the EU.

Cameron is also under pressure from his Liberal Democrat coalition partners and Labour to avoid leading Britain towards the EU exit door.

Business leaders including Sir Richard Branson have warned that uncertainty about the UK's place in the EU is harmful and, in an unusual intervention last week, senior US diplomat Philip Gordon openly stated that America wanted Britain to remain in the EU.

Douglas Alexander MP, Labour’s Shadow Foreign Secretary, said the prime minister's comments this morning "raised more questions than they answered".

"On Europe he's not in control of the agenda or even his party. The gap between his back benchers and our EU partners remains un-bridgeable," he said.

Related on HuffPost: