Conservative ministers would be forced to resign from the Government if they want to campaign for Britain to leave the European Union in the planned referendum, David Cameron has decided.

The Prime Minister has told Tory Cabinet colleagues that they would be bound by the rules of collective responsibility if, as he intends, he recommends that the public votes to stay in the EU after he has negotiated a “new settlement” with other European leaders. One Cameron ally said yesterday: “It would be a government position and so all members of the Government would have to support it.”

The edict could create an agonising dilemma for several Tory ministers who believed the UK would be better off outside the EU. They may have to decide whether to back Mr Cameron or to put their views on Europe first and sacrifice their ministerial careers.

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Those most likely to walk out to press for a British exit include Iain Duncan Smith, the Work and Pensions Secretary and Owen Paterson, the Environment Secretary. Those who have doubts about remaining in the EU, who would want to assess Mr Cameron’s settlement before making up their minds, would probably include: Michael Gove, the Education Secretary; Eric Pickles, the Communities Secretary; Chris Grayling, the Justice Secretary; and Oliver Letwin, the Cabinet Office Minister and Tory policy chief.

Mr Cameron could count on the backing for a “stay in” vote of George Osborne, the Chancellor, and William Hague, the Foreign Secretary, who helped draw up his plan for a an “in or out” referendum by 2017.

The only circumstances in which Eurosceptic ministers would be allowed to campaign for an “out” vote would be if Mr Cameron recommended that course after failing to win a good enough new deal. He refuses to contemplate what he regards as a defeatist scenario.

Mr Cameron’s decision is a setback to hardline Tory Eurosceptics who have already decided to vote to leave the EU, regardless of the new deal on offer. Yesterday Philip Davies, MP for Shipley, said if a referendum were held now, 100 Tories would vote for exit.

Speaking in Davos yesterday, Mr Cameron welcomed the backing for his approach by 56 businessmen who signed a letter to The Times. However, it emerged that some refused to back an “in or out referendum” and insisted on the wording being changed to “democratic mandate”. Eighteen of the signatories have given a total of £10.5m to the Conservative Party. Sheila Gilmore, Labour MP for Edinburgh East, said: “Business leaders have warned of the dire consequences for the UK in leaving the EU, so it is no wonder that David Cameron is forced to rely on his own party donors to support him.”

In an interview published tomorrow, Nick Clegg described a “tactical victory” that will become a “strategic mistake”. He told Parliament’s The House magazine he had “no idea” how the Prime Minister would reinvent the terms of Britain’s EU membership.