By . Tom Mctague, Mailonline Deputy Political Editor . David Cameron warned EU leaders there would be 'consequences' for electing Jean-Claude Juncker president of the European Commission earlier this year and came close to threatening to walk out . David Cameron is preparing to threaten to back Britain quitting the European Union if it refuses to return sweeping powers back to Westminster. The Prime Minister has always refused to say he would campaign to sever ties if he failed to achieve his promised reforms, but is understood to now be prepared to issue the warning. Mr Cameron has pledged that a Conservative government would hold a referendum on EU membership by the end of 2017 after renegotiating Britain’s relationship with Brussels. His efforts to pave the way for a new deal were dealt a blow earlier in the summer when he lost the battle to stop Jean-Claude Juncker becoming the next European Commission president. Mr Juncker is seen as an ‘arch federalist’ in Downing Street – supporting more powers for Brussels over national Parliaments. The PM wants to Britain to be freed from the commitment to an ''ever closer union'' as well as a shift to powers flowing away from Brussels rather than to it. Among the other reforms he wants to secure are a reduction in red tape for businesses and the right to free movement to take up work, not free benefits. But critics warn that a significant overhaul is unlikely and he faces a major battle to win over Mr Juncker after publicly denouncing his candidacy. No timescale has been set for outlining the beefed up stance but the Conservative party's autumn conference is being considered, according to The Times. A source told the newspaper: ‘The shift was almost made public at the time Juncker was appointed, but that timing might have looked like petulance.’ The revelation comes after London Mayor Boris Johnson – seen by many as a future rival for the Tory leadership if Mr Cameron fails to secure a majority at the next election – called on the Prime Minister to declare he was prepared to walk away from the EU. Mr Johnson backed a report which claimed a British exit from the European Union would be better for the country than staying in an unreformed institution. Mr Cameron was furious that Britain's objections to Mr Juncker (right) - seen here receiving the Prime Minister with a high five in Brussels earlier this year - were ignored by other European leaders. He is now preparing to threaten to leave the EU if his proposed reforms are blocked . The study, by the Mayor’s economic adviser, banker Gerard Lyons, says that leaving the EU is ‘definitely a viable option’ and comes a ‘very close second’ to staying in a successfully reformed Union. He has claimed the UK could negotiate a ‘generous exit’ from the EU – giving access the European common market without the current political ties. Mr Johnson said his preferred option was to stay in a reformed EU, adding: ‘I think we can get there; but if we can't, then we have nothing to be afraid of in going for an alternative future, a Britain open not just to the rest of Europe but to the world, where we have historic ties and markets with vast potential for all the goods and services that originate in London - and will continue to do so under any circumstances.’
The Prime Minister may issue threat at next month's Tory Party conference .
Mr Cameron has pledged to hold a referendum on EU membership by 2017 .
He wants to renegotiate Britain's relationship with Brussels before vote .
It has emerged he is now prepared to leave if powers aren't returned to UK .
By . Tom Mctague, Mailonline Deputy Political Editor . David Cameron warned EU leaders there would be 'consequences' for electing Jean-Claude Juncker president of the European Commission earlier this year and came close to threatening to walk out . David Cameron is preparing to threaten to back Britain quitting the European Union if it refuses to return sweeping powers back to Westminster. The Prime Minister has always refused to say he would campaign to sever ties if he failed to achieve his promised reforms, but is understood to now be prepared to issue the warning. Mr Cameron has pledged that a Conservative government would hold a referendum on EU membership by the end of 2017 after renegotiating Britain’s relationship with Brussels. His efforts to pave the way for a new deal were dealt a blow earlier in the summer when he lost the battle to stop Jean-Claude Juncker becoming the next European Commission president. Mr Juncker is seen as an ‘arch federalist’ in Downing Street – supporting more powers for Brussels over national Parliaments. The PM wants to Britain to be freed from the commitment to an ''ever closer union'' as well as a shift to powers flowing away from Brussels rather than to it. Among the other reforms he wants to secure are a reduction in red tape for businesses and the right to free movement to take up work, not free benefits. But critics warn that a significant overhaul is unlikely and he faces a major battle to win over Mr Juncker after publicly denouncing his candidacy. No timescale has been set for outlining the beefed up stance but the Conservative party's autumn conference is being considered, according to The Times. A source told the newspaper: ‘The shift was almost made public at the time Juncker was appointed, but that timing might have looked like petulance.’ The revelation comes after London Mayor Boris Johnson – seen by many as a future rival for the Tory leadership if Mr Cameron fails to secure a majority at the next election – called on the Prime Minister to declare he was prepared to walk away from the EU. Mr Johnson backed a report which claimed a British exit from the European Union would be better for the country than staying in an unreformed institution. Mr Cameron was furious that Britain's objections to Mr Juncker (right) - seen here receiving the Prime Minister with a high five in Brussels earlier this year - were ignored by other European leaders. He is now preparing to threaten to leave the EU if his proposed reforms are blocked . The study, by the Mayor’s economic adviser, banker Gerard Lyons, says that leaving the EU is ‘definitely a viable option’ and comes a ‘very close second’ to staying in a successfully reformed Union. He has claimed the UK could negotiate a ‘generous exit’ from the EU – giving access the European common market without the current political ties. Mr Johnson said his preferred option was to stay in a reformed EU, adding: ‘I think we can get there; but if we can't, then we have nothing to be afraid of in going for an alternative future, a Britain open not just to the rest of Europe but to the world, where we have historic ties and markets with vast potential for all the goods and services that originate in London - and will continue to do so under any circumstances.’
back to Westminster. The Prime Minister has reforms, but is understood to now be prepared to issue the warning. Mr Cameron has pledged that a Conservative government would hold a referendum on EU membership by the end of 2017 after renegotiating Britain’s relationship with it. Among the other reforms he wants to secure threaten to leave the EU if his proposed reforms