Britain has attracted no more overseas investment as a member of the European Union than it would have done alone, research has found.
Many of the myths about the benefits of being part of the single market do not stack up, according to cross-party think tank Civitas.
This would be politically awkward for Nick Clegg and the Liberal Democrats, who have staked their political reputation on campaigning to stay in the European Union due to its economic benefits. The Liberal Democrat leader has previously described the prospect of leaving the political bloc as "economic suicide".
Although the UK enjoyed a boost after joining the then Common Market in 1973, the increase in foreign direct investment (FDI) was short-lived, the Civitas report said.
Overall, there is no evidence to suggest the market encourages investment and many non-members have a better track record of attracting overseas cash, the EU Effect report found.
Single Market founding members - Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Netherlands, Spain, Portugal and the UK - received the equivalent of £9,300 of FDI per person over its first 19 years while independent European countries Norway, Iceland and Switzerland received £16,460 per person, the study showed.
Report author Michael Burrage said: "There is no evidence to suggest that the Single Market as a whole has been a magnet to foreign investors, or that it has encouraged FDI in the UK specifically. Many non-members have attracted more FDI."
The report also dismisses suggestions made when the single currency was being set up that remaining outside would hit investment.
Britain did see a drop in its share of FDI but France and the Netherlands, both eurozone members, were hit by larger falls, it found.
Burrage added: "The rate of growth of the UK's FDI stock over the years 1993-2011 has been comparatively mediocre, slightly below the mean of other founder members. In the meantime, FDI in many independent countries, both in Europe and beyond, has grown at faster - often far faster - rates.
"The case for UK membership of the EU, of the euro, and of the single market, has rested to a considerable extent on claims about their benefits for FDI in the UK, and warnings about the consequences of losing them.
"Much the most credible of these claims is that entry to the Common Market in 1973 boosted FDI in the UK, since the same positive effect can be observed in most other new entrants, whatever date they might have joined.
"However, the claim that membership of the EU as such has been of lasting benefit to FDI in the UK is not credible, and difficult to reconcile with the higher rates of growth in FDI flows and stocks found in many non-member countries in Europe and beyond."
The findings come on the same day that David Cameron is making his last ditch bid to stop Jean-Claude Juncker becoming the next president of the European Commission.
Brexiters
Nigel Farage(01 of09)
Open Image ModalThe Ukip leader and MEP is the most famous 'outer'. After his party took over a 100 council seats in May's local election's Nigel Farage is hoping to win the 2014 European elections and then gain MPs in Westminster in 2015. He has confirmed he will seek a parliamentary seat himself. (credit:PA)
Lord Lawson(02 of09)
Open Image ModalMargaret Thatcher's former chancellor and a true 'Tory grandee' revealed in The Times that if and when there is a referendum "I shall be voting out". He also stuck the boot into the David Cameron by saying the prime minister's attempts to renegotiate the terms of the UK's relationship with the EU would be "inconsequential". (credit:PA)
Backbench Brexiters(03 of09)
Open Image ModalThere are quite a few Conservative MPs who would like to wave goodbye to Brussels. Ken Clarke has said the figure is as low as 30 despite the strong eurosceptic feeling on the backbenches. However the exact number is not clear. Mid-Bedforshire MP Nadine Dorries, who remains suspended from the Conservative Party, is currently talk tof the eurosceptic town amid rumours she may defect to Ukip. Other backbench Brexiters include Bill Cash, Douglas Carswell, Peter Bone and Philip Davies and former defence minister Sir Gerald Howarth. (credit:PA)
Labour's 'Let's Leave' Lot(04 of09)
Open Image ModalMost of the anti-EU focus is on the Tory benches. But there are more than a handful of Labour MPs would would like to quit Brussels as well. Eurosceptics include Frank Field, Kate Hoey, Austin Mitchell, and Gisela Stuart.Stuart has argued the status quo is "not sustainable" and Britain should leave. (credit:PA)
Media Moguls(05 of09)
Open Image ModalRupert Murdoch has warned that the EU will "sink" the UK. The News International and boss caused a stir when he met Nigel Farage for dinner in London recently and said the Ukip leader was "reflecting opinion" with his anti-EU views.In November 2010 Richard Desmond’s Daily Express became the first UK newspaper actively to call for Britain to leave the EU, launching a ‘Get Britain Out’ campaign (credit:PA)
I'm A Celeb, Get Us Out Of Here(06 of09)
Open Image ModalOf course no campaign is complete without a bit of star power. The pro-EU camp have Eddie Izzard, who do the Brexiters have?Joan Collins, a 'patron' of Ukip, wants the UK to leave. "The EU, controlled from Brussels, cares only about itself," she said in March. (credit:PA)
The Business Types(07 of09)
Open Image ModalMost business leaders do indeed seem content with what Lawson called the "warm embrace of the European single market", but there are a few dissenters. Private equity guys Jon Moulton and Edmund Truell are two and Next boss and Tory peer Simon Wolfson has said: "Britain should stay in Europe, but only on the right terms". (credit:PA)
The Commentariat(08 of09)
Open Image ModalThere are a number of loud voices whinnying on the sidelines to say "neigh" to the EU notably Melanie Phillips, Richard Littlejohn, Tom Utley, Simon Heffer.Basically the Daily Mail stable. (credit:PA)
Edging Towards Exit(09 of09)
Open Image ModalSeveral high-profile politicians appear to be on the verge of calling for the UK to exit the EU - but just are not there yet.Former defence secretary Liam Fox - pictured here with a big gun - has said "life outside the EU holds no terror" should David Cameron's hopes of negotiating a new treaty fail.Education secretary Michael Gove is said to have told friends the UK has "nothing to be scared of" by leaving Europe.And many other eurosceptic cabinet ministers, including Iain Duncan Smith and Owen Paterson are likely to share that view. (credit:PA)