Tusk's plan to keep Britain in EU draws mixed response

Cameron mounted a strong defense of membership of the 28-nation bloc after Tusk released details of his plan following weekend talks, saying he would be ready to campaign to stay in the EU if the proposals won the backing of other EU countries.

If the terms worked out with Tusk are accepted and some improvements are made, Cameron added, they will offer the "best of both worlds" for Britain. Cameron has promised a referendum which could happen as early as June.

But with Euroskeptics branding the talks "trivial" and some of Cameron's allies questioning whether the package of measures will be enough, a summit of EU leaders that is due to discuss the proposals on February 18-19 looks likely to be difficult.

"Sometimes people say to me if you weren't in the European Union would you opt to join the European Union," Cameron told reporters and workers at a manufacturing plant in Chippenham, southwest England.

"Today I would give a very clear answer: If I could get these terms for British membership I sure would opt in to be a member of the European Union because these are good terms and they are different to what other countries have."

Cameron rejected criticism that he had watered down his demands, saying improvements to the deal could be made. "This is not a done deal yet, there is a lot more work to be done over these next couple of weeks," he said.

Despite the prospect of further brinkmanship until the summit, financial markets and some business leaders took heart that a deal now appeared more likely, easing some uncertainty.

Sterling jumped by almost half a US cent to US$1.4425 after the outline of the proposed deal was released.

"The deal on the table is better than we expected," said Simon Walker, director general of the Institute of Directors, a business organization.