Boris Johnson calls for EU question to be resolved
Boris Johnson has said investors in Britain "would welcome clarity" about the country's European Union future and that it is time a referendum was held.
The UK should reshape its membership, opting out of some elements, including the common agricultural and fisheries policies and social chapter, he said.
He was confident David Cameron could deliver such a deal, which could then be voted on, Mr Johnson told the BBC.
The prime minister is to make a major speech on Europe within weeks.
Sources close to Mr Cameron suggest he is ready to offer a referendum on a renegotiated deal with the EU.
However, senior pro-European figures have suggested that Mr Cameron will struggle to obtain the concessions outlined by Mr Johnson from the rest of the European Union.
Former Prime Minister Tony Blair said last month: "There will be varying degrees of politeness. But they will not thank us and will not accommodate us."
Mr Johnson told Jeremy Paxman the government should be carrying out a "wholesale renegotiation" of Britain's membership of the European Union, which would ensure Britain remained in the single market.
And that the British people should then vote on whether this new "outer tier" membership should be adopted or the country totally withdraw from the EU.
"We've been on this now for so long and we haven't had a referendum since 1975. It is perfectly obvious that the Europe question has got to be put to the British people," Mr Johnson said.
"Do you want to be in or not?"
"It is ridiculous to say now that Britain is in the heart of Europe, we're patently not... there is no reason at all why together with other countries which I think basically share our view of the thing we shouldn't construct a relationship that better suits us, that better suits the interests of British business," he said.
Opinion polls suggest many British voters are disillusioned with the EU, but Mr Johnson told BBC Two's Newsnight programme British business interests would be harmed if the British people voted to leave the European Union entirely.
"If they were to vote to come out... my judgement is we would be losing substantial protections for British business, for British enterprise that exist within the single market," he said.
"It might conceivably be a deterrent to foreign direct investment if they thought that we were not going to be members of the internal market."
Mr Johnson added that even though he believed leaving the EU entirely was not the best option for Europe, "I don't think this would necessarily be the end of the world".
"People said when we didn't join the euro that those buildings over there, the City of London, would collapse and that great big radioactive rats would crawl out of the gutters and gnaw the faces off the last British bankers, that it would be a disaster. It hasn't been a disaster."
Watch the Newsnight discussion on how Britain would fare outside Europe, with senior business, political, European and cultural guests on Wednesday 12 December 2012 at 22:30 GMT on BBC Two. Or catch up afterwards on BBC iPlayer.