The British Influence group says shock of withdrawing from EU could marginalise nationalists in Northern Ireland and cause a fall in GDP

A British exit from the EU would have a “shock and awe” impact on the UK which would see the economy shrink and the Northern Ireland peace process threatened, according to a report by one of the main pro-European campaign groups.

As the government braces itself for parliamentary battles on the EU this week, the British Influence group warns that Britain would face huge consequences, which would be unclear, if it left the EU.

The first chapter of the report says: “The initial shock would be huge and the consequences unclear. Several factors would make this an exceptionally serious crisis.

“It is hard to see how David Cameron could remain in office after such a defeat ... Defeat would represent an existential threat to the UK. Nicola Sturgeon has said that [it] would be sufficient to justify a second referendum on Scottish independence.”

The report, which appeared to counter the claims by the main pro-EU Britain Stronger in Europe campaign that it would run a positive campaign, was immediately criticised by Vote Leave as scaremongering.

British Influence published its report amid increasing tension in the run-up to a European summit in Brussels next week where David Cameron had hoped to reach an agreement with fellow EU leaders. The prime minister has conceded he might have to wait until the next summit in February due to opposition from fellow EU leaders to some of his demands, in particular the call for EU migrants to be denied access to in-work benefits for their first four years in the UK.

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The government will seek on Tuesday to overturn a vote in the House of Lords to allow 16- and 17-year-olds to vote in the EU referendum. MPs have repeatedly voted in favour of holding the refendum on the current franchise, raising the prospect of lengthy parliamentary “ping pong” in which a bill passes to and fro between the two houses of parliament in the event of deadlock.

On the same day, the government may face a rebellion from Eurosceptic Tories against plans to opt into a European fast-track scheme to share police DNA and fingerprint databases. Theresa May, the home secretary, said after the Paris attacks that Britain wanted to opt into the scheme which will give British police accelerated access to more than 5m fingerprints, DNA profiles and car registration records held across the EU.

British Influence stepped into the debate by warning that the consequence of a UK exit would be that the economy would contract. “All this would result in a fall in GDP in the aftermath of the vote with recovery depending on how quickly the UK was able to negotiate new trading relationships with the EU and third countries.”

The report warned of the impact on the Northern Ireland peace process on the grounds that a withdrawal from the EU might make nationalists, who support the EU in greater numbers than unionists, might feel isolated. The report says: “This stark division between the two communities must be a cause for concern and it vividly demonstrates why the peace process in Northern Ireland could be endangered by Brexit.”

Robert Oxley, head of media for Vote Leave, dismissed the report, saying: “Scaremongering from British Influence doesn’t even carry weight with its own side, let alone the public who know that taking back control from the EU is the safer option. This is the first of many reports that will be produced from the in-at-all-costs brigade predicting doom and destruction if we Vote Leave from the same characters who made the same predictions a decade ago about the euro. They were wrong then and they are wrong now.”

The report concludes with 10 questions for the out campaigners, including what their ideal arrangement would be for the UK outside the EU and how they would negotiate access to the single market while being exemptfrom the EU’s rules on freedom of movement.