31 December 2012 Last updated at 15:16 ET

EU federalists: UK could be 'associate member'

Andrew Duff MEP has long campaigned for a more federal Europe

The UK could be offered second-class status in the EU, under a proposal from some senior politicians in Brussels.

Andrew Duff, a Lib Dem MEP, heads the Union of European Federalists, which has long pushed for more pooling of sovereignty.

He told the BBC "associate member" status would mean the UK giving up much of its influence in the EU.

"We're now at a point where there ought also to be the option of various formal tiers of membership," he said.

In early 2013, UK Prime Minister David Cameron is due to give a major speech on Britain's relationship with Europe. He is expected to call for some powers to be returned from Brussels to London.

Powers in the areas of justice, policing and labour law are high on Mr Cameron's Conservative Party wish-list.

Many Conservatives want to go further, with an "in or out" referendum on whether the UK should be part of the EU at all.

Mr Duff said there was no enthusiasm in the EU for more British grumbling, the BBC's Matthew Price reports from Brussels. But he said he did not want to see the UK leave the EU altogether.

His group only speaks for a section of EU thinkers, our correspondent says, but the ideas will feed into the debate about the UK's future relationship with the EU.

'Still friends'

Analysis

Gary O'Donoghue Political correspondent, BBC News

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As the pressure grows on David Cameron to lay out his plans for Britain's future in Europe, these proposals for a looser relationship with Brussels have been welcomed by a growing band of Conservative eurosceptics, including John Redwood, who called them "good news". But they will also cause tensions in government, given the Lib Dems' pro-European credentials.

The "associate membership" set out by the Union of European Federalists could see Britain lose its commissioner in Brussels and eventually its MEPs and a seat at the table of the Council of Ministers too. What is more, it could lose the power to influence things that have an impact on the single market, like employment laws.

In a major speech in January, Mr Cameron will set out his own vision for Europe, including how he would like to repatriate powers from Brussels and focus more on trade and the single market.

But he is still resisting concerted pressure from hardline Tory backbenchers for an in/out vote, and the recent apparent rise in support for UKIP means the issue of Europe has been pushed right up the political agenda.

Last week former EU Commission President Jacques Delors said he could envisage the UK having a looser relationship with the EU, with a new free trade agreement, or as a "privileged partner".

"If the British cannot support the trend towards more integration in Europe, we can nevertheless remain friends, but on a different basis," the French former minister told the German business daily Handelsblatt.

Mr Delors, one of the architects of the euro, said "the British are solely concerned about their economic interests, nothing else.

"They could be offered a different form of partnership."

A member of the British Conservatives, the MEP Martin Callanan, said while he wanted changes to Britain's EU membership, he did not like the idea of second-class status.

''We'd end up with a lot of bad things in terms of all the single market legislation, but no means of influencing that legislation either through commissioners [or] MEPs. But we would still be subject to the jurisdiction of the [EU] Court of Justice.''

And the Confederation of British Industry lobby group is pressing for Britain to keep its place and status within the European Union, to push for freer trade.

The CBI's director-general, John Cridland, said: "The UK has ensured its values of free and open trade have been at the heart of Europe over the last 40 years, helping to create one of the biggest successes of the European Union - the single market."