David Cameron has criticised Tory "pessimists" demanding immediate withdrawal from the European Union.

The prime minister defended his approach of seeking fundamental reform and holding a referendum on membership after 2015 as logical, sensible and practical.

The intervention, at an investment conference in central London, came after another senior Conservative urged an EU exit.

Former cabinet minister Michael Portillo described Cameron's plan as an insincere ploy and said the EU no longer served the UK's interests.

The former chancellor Lord Lawson expressed similar views earlier this week amid growing unrest in Tory ranks over the rise of Ukip.

However, the prime minister said he believed it was possible to push through changes to the EU.

"I am faced as I do so, if you like, by two groups of pessimists," he said. "There are some pro-European pessimists who say: 'You have to, in Europe, simply sign up to every single thing that anyone in the EU suggests. You sign every treaty, you sign everything – there is no alternative.' I think they are completely wrong.

"The second group of pessimists say there is no prospect of reforming the EU, you simply have to leave. I think they are wrong too. I think it is possible to change and reform this organisation and change and reform Britain's relationship with it."

Cameron said he was right to bring the debate on Europe into the open, stressing that the union needed to change.

"It is not competitive enough, it is not open enough, it is not flexible enough, and it is not competing effectively with fast-growing parts of the world," he said.

"Added to that you have the European single currency, which is driving enormous change in Europe as it involves the members of that single currency giving up large amounts of sovereignty about how they run their countries.

"At this moment when the single currency is driving such change it is completely right for Britain to say, we want to make some changes with our relationship with the EU, we want to make some changes to the EU itself.

"The EU is going to have to be flexible enough to include within it countries like Britain who are not in the single currency and won't join the single currency, and countries that are in the single currency. That is a totally logical, sensible, practical position."

Cameron said his was an optimistic approach rather than a pessimistic one.

He insisted it was in Britain's interests to "remain a country that is uniquely well connected around the world".