British businesses gave qualified backing to the Prime Minister's pledge for an in/out referendum, but raised fears the vote will create greater uncertainty for under-pressure UK companies.
The British Chambers of Commerce (BCC) called on the British government to bring forward the timetable to ease uncertainty, while manufacturers also warned that David Cameron's tough-talking strategy could weaken the UK's ability to influence reforms in the EU.
John Longworth, director general at the BCC, said: "Announcing plans for a referendum on British membership puts the onus on the rest of Europe to take the Prime Minister seriously, as they will now see that he is prepared to walk away from the table."
But he added: "The lengthy timescale for negotiation and referendum must be shortened, with the aim of securing a cross-party consensus and the outline of a deal during this Parliament."
The Institute of Directors (IoD) also welcomed the referendum on the UK's membership of the EU, saying it was better to put it to vote than "shy away" from the issue.
Simon Walker, director general of the IoD, said the move will help put to rest doubts among its members who have become "sceptical about many of the institutions and practices of the EU".
"A future referendum to decide the workings of our relationship is the best way to affirm Britain's participation in a free-market Europe which is competitive and deregulated," he added.
However, Mr Cameron's plans are "not without risk", according to the EEF manufacturers' organisation.
Europe is the UK's biggest trading partner and there are worries among manufacturers in particular that an exit from the EU would further weaken Britain's export industry.
The latest figures show that UK exports to the EU stood at £13.1bn (€15.5bn) in November, against £12bn (€14.3bn) for the rest of the world.
Exports to the EU have already been hit badly by the eurozone debt crisis and were down another 5.8% between October and November and 2.7% lower year-on-year.
This has further increased the global trade gap, with exports of £24.8bn (€29.5bn) far outstripped by imports of £34bn (€40.4bn) in November.
Terry Scuoler, chief executive of the EEF, said: "If the door to a UK exit from the union is open it will diminish our ability to influence the reforms that Europe needs."
He also said there needed to be a "dramatic improvement in the quality of rhetoric and debate" for the British public to make a properly informed decision.
Neil Prothero, lead UK analyst at The Economist Intelligence Unit, said the uncertainty over the UK's future in the EU could damage the UK's attractiveness to businesses, given the UK's already shaky economic outlook.
"Will firms - domestic and foreign - be prepared to commit to invest in the UK in such an environment?," he said.