Eurosceptics 'may well carry the day' and win campaign to take Britain out of the EU, says Duncan Smith

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Eurosceptics who want British to leave the European Union 'may well carry the day' in the forthcoming referendum, Iain Duncan Smith admitted today.

The Work and Pensions Secretary, seen as one of the most strident opponents of Brussels in the Cabinet, said there was a 'powerful argument' about leaving the EU.

The remarks will be seized on by those opponents of David Cameron's plan to renegotiate Britain's EU membership before holding an in-out referendum by the end of 2017.

Eurosceptics who want British to leave the European Union 'may well carry the day' in the forthcoming referendum, Iain Duncan Smith admitted today

Mr Duncan Smith is bound by collective ministerial responsibility, forcing him to formally back Mr Cameron's renegotiation efforts ahead the referendum. 

However, his remarks in the Commons today suggest he sees strength in the arguments of Eurosceptics who want to leave the EU and are sceptical of the Prime Minister's ability to win back significant powers.

It is unclear whether Mr Cameron will relax the rule of collective responsibility during the referendum campaign to allow ministers to back either the In or Out camps.

In the Commons Tory MP Philip Davies told the minister: 'I commend you for all the efforts you are making to restrict benefits for European citizens within the framework of the law.

'But will you agree with me that the only way that this country will ever get complete control over benefits policy for EU citizens is by leaving the European Union?'

Mr Duncan Smith replied: 'The Prime Minister has given the country a referendum on that matter which is a huge step forward for the honourable gentleman opposite and for everybody else.

'They'll all have a vote on that and I suggest at that moment you are able to make that powerful argument and I'm sure that no doubt under your rhetoric you may well carry the day.

The government is committed to holding an in-out referendum by the end of 2017, with the Prime Minister focussing on four key areas: ensuring UK sovereignty, improving competitiveness, protecting economies not in the Eurozone and curbing benefits for migrants.

Mr Cameron has previously threatened that he could campaign to leave the EU if he does not get a good deal, insisting he will 'rule nothing out'.

He is expected to spell out his full demands ahead of a Brussels summit in December when EU leaders will be asked to back his call for change.

In a bid to bolster the UK's case, Chancellor George Osborne is in Berlin today hoping to win German support for reform. 

In discussions with senior German ministers, Mr Osborne is warning that despite the joint economic power of the two nations, action must be taken to overhaul the European Union to protect against future challenges.

In a bid to bolster the UK's case, Chancellor George Osborne is in Berlin today hoping to win German support for reform

Securing backing from Germany is crucial to the success of the plans to renegotiate Britain's relationship with the EU and Mr Cameron has keenly courted support from Chancellor Angela Merkel.

Mr Osborne, who is meeting finance minister Wolfgang Schauble and federal economic affairs minister Sigmar Gabriel, said: 'The UK and German economies are the beating heart of Europe, the engine for growth and jobs.

'Together we make the world's third-largest economy, behind only America and China and since the crisis ended, we have generated two-thirds of EU growth.

'But the future holds challenges for our economies. We must cut debt and boost productivity. To do this, we need a strong EU, fit for today's challenges and working for the benefit of all 28 member states.

'The UK's reform and renegotiation plans aim to achieve this, which is why these talks with key partners in Europe are so important.' 

It follows 'positive' talks with ministers in Helsinki, Stockholm and Copenhagen to build support for the UK's demands for a new settlement earlier this year.