Britain should use the euro zone debt crisis to renegotiate its position in the European Union, an independent think tank set up by UK business leaders told CNBC.
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"The euro zone crisis is an opportunity for Britain to take a step back and say: ‘We cannot join the euro, that is politically impossible, impossible because of domestic opposition here in Britain to sign up to more decision-making powers flowing to Brussels," Mats Persson, Director at Open Europe, told CNBC.
He added that a more flexible arrangement would be the best solution, where co-operation with other EU members would be favorable but fewer powers handed over to the EU.
"It's in Britain's interest to find a way in which it can be comfortable within the European Union rather than withdrawing completely.
It doesn't quite want to withdraw altogether but the status quo is unacceptable as well," Persson added.
The current coalition government, led by the Tory party, is heavily influenced by the euro skeptic wing of the party.
Prime Minister David Cameron's decision to veto an amendment to the EU treaty to tackle the debt crisis at a summit of EU leaders in December was applauded by many.
As the euro zone crisis has deepened, there have been growing calls among certain sections of the political establishment in the UK to limit the influence of the EU in the UK and even to repatriate some powers back to Westminster.
The mooted Financial Transaction Tax – dubbed the “Tobin Tax” has been a particular bone of contention within the UK with fears the City of London would be hardest hit.
Mark Gettleson, Senior Political Analyst for Dods Engagement, a political communications firm, disagreed with lessening Britain's involvement in the EU because it would lead to less influence at the detriment of the UK.
"The situation is so serious and fast-moving we risk becoming totally irrelevant if we're not bought into the EU as it is now - we're certainly not going to be bought into it as it develops as the economic crisis will no doubt involve greater integration,” he said.
He said the UK needed the opposite of the repatriation of powers the government seeks continually "because polls indicate the public want withdrawal with seemingly ever fewer politicians bought into the European project".