More than 50 Tory MPs are poised to lead the campaign for Britain to quit the European Union if David Cameron fails to secure radical reforms of the UK's ties to Brussels.
Former Cabinet ministers Owen Paterson and John Redwood are among backers of the newly formed Conservatives for Britain (CfB) that will initially support the Prime Minister's bid to renegotiate terms of membership for the UK.
But the groups stands ready to lead the charge for exit if the deal the premier secures fails to gain major changes such as regaining control over British laws and free trade powers.
Conservative MP Steve Baker, the campaign's Westminster chairman, said: "Conservatives for Britain supports the Prime Minister in seeking fundamental change in our relationship with the EU.
"The Conservative Government has promised the British people an in/out referendum on Britain's EU membership and we must explore the possibility of leaving if the EU do not agree to radical reform."
MPs backing the group are reported to have met twice in Parliament since the election and MEP supporters are due to hold a meeting in Strasbourg on Wednesday. Outline plans have been drawn up that state the CfB "support the party's policy of renegotiation and referendum" but "take an optimistic, globalist view of the UK's future" and "will discuss how to prepare for a possible 'out' campaign".
Among those who have agreed to be named are senior eurosceptic Bernard Jenkin and former shadow frontbencher Julian Lewis as well as newly elected Tories James Cleverly, Tom Pursglove, Anne-Marie Trevelyan, and Craig Mackinlay, according to the Telegraph.
Conservative MEP and CfB co-founder David Campbell Bannerman, a former Ukip member, said: "CfB believes that the UK's current relationship with the EU is untenable and if the EU are not willing to return significant powers to our shores, then Britain should leave.
"We will set out what we believe needs to be achieved in the renegotiation process if Britain is to remain a member of the EU.
"Restricting freedom of movement of EU citizens and making the UK Parliament sovereign over EU law are likely to feature heavily on our agenda."
Mr Paterson, a former environment secretary, called on the Prime Minister to allow ministers to join the No campaign.
"We all hope that the deal is satisfactory and will be widely accepted but if there are individuals in the Cabinet who are not happy with the deal, they should be allowed to campaign," he told The Telegraph.
"If that is not allowed, these people - if they have got any character about them at all and are interested in the future of their country - should stand down and campaign according to their conscience."
It comes after Nigel Farage said Ukip was starting the "ground war" for the campaign to leave the EU.
The eurosceptic party leader said he wanted his party to be part of a wider coalition of Labour and Conservative politicians and leading business figures.
Holding the planned in/out referendum next year instead of 2017 would leave the No campaign struggling to get its message across without action now - and it was time to "get cracking", Mr Farage warned.
Meanwhile, Rafał Trzaskowski, Poland's secretary of state for European affairs, said voters must be told the truth about the consequences of leaving the EU.
Pressed over whether he believes Britons might vote for exit, he told the Observer: "It really depends on how the whole thing is depicted by British political parties to the British people – what kind of alternative is painted.
If you say you can leave and still be part of the internal market and keep your [second] houses, that you will still be free to travel, that there will be no customs duties, and so on and so forth – but that you will not have to accept free movement of workers, and you will not pay into the EU budget, of course people will vote [to leave] ... but this is simply not true."
He added: "If Great Britain leaves, it will minimise its role. I am not trying to be patronising. I think we have to be frank with the British people when we talk about their future in the European Union. Many people in Europe want to be accommodating ... but if the demands are too extreme, they are not going to be met.
"You cannot keep all the goodies and forget about the costs. Britain will still have to pay into the EU budget, just as the Swiss and Norwegians do.
"It would have no influence over the decisions yet it would have to subscribe to all the rules. London would not be that sexy a place for capital movement because it would have much looser links to Europe."