David Cameron is to publish his own draft EU referendum bill
A senior Conservative source said the party would "examine all opportunities" to bring the legislation before Parliament, meaning the bill could be taken through the Commons by a backbench Tory MP, something some Tories have already expressed interest in putting forward.
Shadow foreign secretary Douglas Alexander said the move showed Cameron had lost control of his party - but the draft bill will also force the Labour to show their hand when it comes to supporting an in/out poll.
In a new Guardian/ICM poll, the UK Independence Party are now polling a record high of 18%, with support for the three main parties all falling.
Ukip leader Nigel Farage said: "This is nothing more than gesture politics. The Conservative party's position is clearly not a position Cameron holds in his heart.
"The very fact that he is in America selling the EU to the Obama presidency while members of his party are making what amounts to a contradictory statement back at home just goes to show this is an act of sheer desperation.
"This is clearly a Prime Minister not in control and a Government in total disarray. It is a basic principle of our democracy that no Parliament can bind a successor, without the support of Parliament this is a meaningless piece of constitutional shadow play."
Alexander said that the gesture appeared to be a "panicked response from the Prime Minister who is now following, rather than leading his backbenchers.
"David Cameron is a Prime Minister who has both lost control of the agenda and lost control of his party.
"Labour have said that we don't think committing now to an in/out referendum up to four years from now is in the national interest because the priority must be getting growth into the economy not getting Britain out of Europe.
"This latest step has more to do with trying to get his party back in line rather than getting the economy back on track."
The ballot to decide which MPs will get the chance to introduce their own legislation will be held on Thursday and any Tories who secure a prime spot near the top of the list will face pressure from Eurosceptic colleagues to take up the referendum bill.
A senior Lib Dem source said the issue of an EU referendum law was not discussed during coalition negotiations on the Queen's Speech and Cameron's move was prompted by "internal Tory trauma".
The source said: "The Conservatives are free to bang on about Europe as much as they like within their own party.
"Rather than spend time debating an internal Tory trauma on an issue where the Government has a clear position, the Liberal Democrats will focus on jobs and growth.
"The coalition Government have already passed a law - fully supported by the Liberal Democrats - that guarantees a referendum next time there is a transfer of power from Westminster to Brussels.
"When we were discussing that legislation, we didn't hear a peep out of the Conservatives about all this. Neither did we in discussions on the Queen's Speech.
"We're a bit nonplussed that the Conservatives keep moving the goalposts."
Ukip leader Nigel Farage called the draft bill 'gesture politics'
John Major's former press secretary told HuffPost UK on Monday that the EU row engulfing Cameron has "depressing" echoes of the 1990s.
Sheila Gunn urged Tory rebels to "show some common sense" and said the party risked handing election victory to Labour.
Cameron received a welcome boost on his visit to the United States as President Barack Obama backed his strategy of seeking a renegotiation of Britain's membership of the EU before holding a referendum on withdrawal.
Speaking after talks with the Prime Minister in Washington, Obama said it "makes some sense to me" to try to "fix" the relationship before deciding whether to leave.
His comments, which delighted Downing Street aides, came as growing numbers of Conservative MPs signed up to a parliamentary motion calling for legislation on an EU referendum, which is expected to spark a potentially divisive vote in the House of Commons tomorrow.
Ministerial aides Stuart Andrew and Gavin Barwell said they will back the amendment after Downing Street took the unusual step of saying that parliamentary private secretaries (PPSs) are free to do so without losing their jobs.
Ministers have been told they may abstain but not vote for the amendment.
Cameron said he regarded the status quo in Europe as "unacceptable", but declined to say whether he would vote to leave in an immediate referendum, unlike Cabinet ministers Michael Gove and Philip Hammond who said that they would sever ties with Brussels if there was a vote now.
The Prime Minister insisted that "the whole of the Conservative Party" was signed up to his policy of renegotiating if he wins the 2015 general election and then staging a national poll in 2017, adding: "We are the only mainstream party making this offer to the electorate at the next general election."
At a White House press conference, Cameron insisted that a referendum now would not be in the national interest, as voters would be presented with a "false choice" between an unreformed EU or British exit.
Obama stressed that the decision on the UK's future was a matter for the British people, but added: "David's basic point that you probably want to see if you can fix what is broken in a very important relationship before you break it off makes some sense to me.
Tory MP John Baron, who tabled the rebel amendment regretting the lack of a referendum Bill, said backing it would be the best way of ensuring Cameron's referendum pledge became law.
"If the Government thinks it's going to get this Bill through by any other means than actually introducing it itself - it's talking about a private member's Bill - that is a ploy that could well fail," he told BBC News.
"By far the better option is for the Government to have the courage to support our amendment on Wednesday, force Labour and the Liberals to decide and if we succeed in that amendment then the Government could introduce a Bill through normal channels and that would have a much better chance of succeeding. That would be the better approach."
But fellow Tory Nadine Dorries said 2017 was too long to wait for the referendum and criticised the coalition for bringing forward bills which have alienated grassroots Conservatives.
"If we can give the gay marriage promise legislation, if we bring through an AV referendum then we need to bring through this much quicker," she told BBC2's Newsnight.