The UK will vote to stay in a reformed Europe if legitimate concerns about the way Brussels operates are addressed in the renegotiation process, David Cameron has predicted.
The Prime Minister said he was "confident" he would be able to recommend to the British public that they should stay in the European Union when he holds the referendum promised by the end of 2017.
He told an audience of business leaders that the negotiations were "going well" as he tried to secure key changes in the way the EU's rules work.
Mr Cameron indicated that his renegotiation plan and referendum could help keep the UK in the EU.
"My sense was that Britain was drifting towards the exit of Europe because no one was addressing the legitimate concerns British people, including British businesses, had about the way Europe was operating.
"We need to address those concerns and if we do I think the sense will prevail that we should stay in a reformed Europe."
At an event in central London aimed at boosting trade and investment around the Rugby World Cup, Mr Cameron said he was determined to ensure that the concerns of non-eurozone countries were addressed.
"We are very enthusiastic members of the single market," he said. "My strategy can really be boiled down to one sentence, which is that we need to reform Europe so that it is flexible enough that you can succeed as a country inside the single currency, or succeed as a country outside the single currency.
"That is what we need and that is my aim as these renegotiations secure some key changes, not just for Britain but for other European countries as well, to make sure that if you are in the single market but not in the single currency you are not committed towards moving towards some sort of superstate."
Mr Cameron called for a "real emphasis on competitiveness and flexibility so Europe wins in the global race rather than loses".
Highlighting the most controversial and potentially difficult elements of his proposals he added: "We do need some better control over some of these issues like welfare and immigration to take into account countries' special circumstances.
"I believe these are all achievable. I think the negotiations are going well, I am confident that when the referendum comes I will be able to recommend to the British people that we stay in a reformed Europe."
In his speech at the investment conference at Lancaster House, Mr Cameron said the UK was proud of attracting overseas investment unlike some European rivals who had a "sense of embarrassment" about foreign firms and countries putting money into them.
Matthew, Elliott, chief executive of the Eurosceptic Business for Britain campaign said: "In the past David Cameron rightly set out that we need fundamental changes to Britain's relationship with the EU so that we can regain control over our economy. He said that this must include full-on treaty change.
"However he now appears to be engaged in a public relations exercise to lower expectations so far that even minor changes will be portrayed as a grand victory.
"Only a deal that brings real powers back, gives the UK control over trade deals and ends the supremacy of EU law over UK law will do. Only real reform will satisfy the millions of entrepreneurs who are worried about the damage that the unreformed EU is doing to their business."
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