In a spectacular U-turn, media mogul Rupert Murdoch has abandoned his plan to campaign for Britain to withdraw from the EU.

He has decided that Britain is better off staying in Europe and that to quit would be a ‘major risk.’

The move is a huge boost to David Cameron as he bids to persuade the public to vote ‘Yes’ in a referendum to take place before the end of 2017 on whether Britain should maintain its ties with Brussels.

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Change of heart: Rupert Murdoch is understood to have changed his position on Europe because of fears over what a 'Brexit' could do to industry - which is likely to be a huge boost for pro-EU Cameron

But it is a massive blow to anti-EU campaigners urging voters to say ‘No’. They had expected Murdoch, whose media empire includes The Sun, The Times and Sky TV, to play a vital role in the ‘Out’ campaign.

A well-placed source told The Mail on Sunday: ‘Mr Murdoch’s view of the EU has mellowed in recent years. He is no fan of bureaucratic blocs but if it comes down to a choice between Britain getting out of the EU or staying, he would stay in.’

The main reason for Murdoch’s new pro-EU stance is that leaving could damage British industry.

‘It could be a huge pain for industry if we leave the EU,’ said the source. ‘If you are trying to sell widgets made in Sunderland, it is a great advantage to make them to a common standard so you can compete with rivals in Stuttgart.’

Murdoch also supports the Prime Minister’s attempt to reform the EU in the run-up to the referendum.

‘Mr Murdoch wants the UK to get a better deal from the EU so it can stay in,’ said the source.

Another figure with close links to Murdoch compared his U-turn to a similar change of heart before last year’s referendum on independence for Scotland, when there were rumours he was poised to throw his full weight behind the SNP.

Power: Former Prime Minister John Major revealed last year that Murdoch threatened to withdraw support for his government because of his pro-Europe stance

‘His heart told him Scotland should be independent, but his head said the UK should stay together,’ said the insider. ‘His heart says the UK should get out of the EU, his head says we should stay in.’

Murdoch has a long record of using his papers to argue the case against Brussels. In 1990, The Sun launched an astonishing attack on European Commission President Jacques Delors, who believed in closer EU federal ties. The front-page headline said: ‘Up Yours Delors’.

Murdoch’s anti-EU stance was frequently backed up by lobbying in person at Downing Street. John Major told the Leveson Inquiry into media ethics that at a private dinner Murdoch said he wanted Britain to withdraw from the EU.

Murdoch ‘made it clear that he disliked my European policies, which he wished me to change’.

When Major told Murdoch he would not do so, Murdoch told him ‘his papers could not and would not support the Conservative government’.

Murdoch told MPs in 2011 that he had ‘heated discussions’ with Tony Blair over the Labour leader’s enthusiasm for the EU.

Two years ago, Murdoch’s hostility to the EU appeared undimmed when he had dinner with Ukip leader Nigel Farage at the News Corp chief’s London home. Murdoch tweeted pointedly that Farage’s policies ‘reflected opinion’.

Shortly afterwards Murdoch mocked a ‘stagnant Europe racked by discontent and resentment of EU’, and boasted he was glad he had ‘contributed to UK resisting the euro over many years’.

Murdoch’s surprising pro-Brussels stance is the latest encouragement for those campaigning for Britain to stay in the EU. Opinion polls suggest clear public opposition to leaving.

And some Eurosceptic supporters are opposed to the referendum being brought forward to 2016 on the grounds that they need more time to argue the case for withdrawal.

Tory MEP and anti-EU campaigner Daniel Hannan yesterday claimed ‘Yes’ supporters were trying to ‘scare’ the public into believing Britain cannot leave the EU.

‘The referendum doom merchants are lining up to insist Britain can’t survive outside the EU,’ said Hannan.

'It is twaddle. We would flourish as never before.’

Cameron visited The Hague, Paris, Warsaw and Berlin last week to win support from fellow EU leaders.

German Chancellor Angela Merkel said she did not rule out EU treaty reforms, but the Poles flatly rejected such changes.