Ministers able to campaign for either side in EU referendum

They will be given this freedom after he has completed his renegotiation with other EU leaders.

Mr Cameron is following the policy adopted by Harold Wilson in 1975 when Britain voted on whether to remain in the EEC. His Labour cabinet colleagues were able to campaign on either side.

Liberal Democrat leader Tim Farron said the Prime Minister was “failing to lead” and “putting his own internal party strife above what’s best for Britain”, while Alan Johnson, chair of the Labour In For Britain campaign, said Britain’s place in the world was “far more important than any internal Conservative issues or jockeying for position in a post-David Cameron leadership contest”.

The Prime Minister had been under pressure from Conservative eurosceptics to allow MPs to campaign as they please in the run-up to the referendum, which is likely to be held this year.

Several senior eurosceptics were thought to be ready to resign if they were forced to back an in vote following Mr Cameron’s renegotiation.

They will not be able to break ranks with Mr Cameron, whose objective is to secure a deal that will keep Britain in the EU, until the renegotiation has been agreed. This cannot happen until next month’s EU summit at the earliest.

Split

The Conservatives are deeply split over Europe, with MP Steve Baker, of the Conservatives For Britain group, recently suggesting more than half of his colleagues were “strongly leaning” to leave and that senior resignations were inevitable if the cabinet was forced to toe a common line.

Former Tory leader Lord (Michael) Howard had urged Mr Cameron to allow his cabinet to campaign on both sides, while former prime minister Sir John Major called for cabinet collective responsibility to be maintained.

The prime minister’s renegotiation is built on several key demands. He wants Britain to be exempted from “ever closer union” and to receive protection from further eurozone integration.

He is also demanding that efforts are made to boost the EU’s competitiveness, but his call for migrants from other EU countries to be denied in-work benefits and social housing until they have lived in Britain for four years has been rejected by other EU leaders.

‘Most important decision’

Mr Cameron said in November he was not seeking “mission impossible”, adding: “I have every confidence that we will achieve an agreement that works for Britain and works for our European partners.

“If and when we do so… I will campaign to keep Britain inside a reformed European Union.

“But if we can’t reach such an agreement and if Britain’s concerns were to be met with a deaf ear, which I do not believe will happen, then we will have to think again about whether this European Union is right for us. As I have said before, I rule nothing out.”

Mr Cameron said the referendum was “perhaps the most important decision the British people will have to take at the ballot box in our lifetimes”.