By Guy Faulconbridge and Andrew Osborn
LONDON/NEW YORK (Reuters) - Prime Minister David Cameron faced questions about his leadership on Tuesday after he bowed to pressure from inside the ruling Conservative Party to bring forward draft legislation enforcing a referendum on Britain's European Union membership.
Just hours after U.S. President Barack Obama cautioned against rushing towards the EU exit, Cameron was forced by a rebellion in his party into promising a bill that would pave the way for an in-out vote on Europe.
Cameron denied the move was a desperate measure to placate his increasingly restive and eurosceptic party, where many see the EU as an oppressive and wasteful "superstate" that threatens Britain's sovereignty.
"I think when all the dust has settled people will be able to see the substance of the issue," he said.
"That is that one party, the Conservatives, has a clear agenda: renegotiate, change Europe, have a referendum on it - the others parties don't take that approach," he told Sky news.
On the contrary, he said, he had shown leadership on the issue.
"The whole reason that we are now having this debate is because of the act of leadership I gave," he told ITV News, referring to an earlier promise to hold a referendum.
Yet the more ground Cameron concedes to his eurosceptic lawmakers, the more they want, deepening the 25-year battle in his party over Europe and undermining his own chances of leading it to victory in a general election set for 2015.
Divisions over Europe helped bring down the last two Conservative prime ministers, Margaret Thatcher and John Major, and many politicians compared Cameron's position to that of Major whose premiership was driven by rows over Europe.
"There is no way that he (Cameron) can give in any further because he's undermining his own position," said Sheila Gunn, who served as spokeswoman to Major.
Conservative lawmakers who back the new bill deny the move undermines Cameron. For them, it is a way of showing a skeptical public that the Conservatives really do want a referendum on Britain's EU membership, but are being held back.
The party's Liberal Democrat partners in coalition government are pro-Europe and oppose a referendum, while the opposition Labor party says it does not support a vote on the EU in 2017, the date proposed by Cameron earlier this year.
"We've set out our position and published this bill to give the British people an in-out referendum on Europe ... Now it's vital to hear whether Labor and the other parties are actually prepared to trust the British public," Conservative Party chairman Grant Shapps said in a statement.
Cameron's advisers hope the draft bill on an EU vote will end internal bickering. A Downing Street spokesman insisted Cameron was still in charge.
History shows Cameron is treading a risky path.
The three eurosceptic Conservative Party leaders who followed Major failed to get into power, and Cameron's capitulation over the new EU referendum bill has created the impression he is not in control of his own party.
"David Cameron's weakness has turned a European issue into a leadership issue," Labor foreign affairs spokesman Douglas Alexander said.
In January, Cameron promised to renegotiate the terms of Britain's EU membership and then hold a referendum by the end of 2017 in a speech meant to draw a line under the issue.
But some lawmakers had called for further concessions and media reports said Cameron's leadership could be challenged.
Cameron's potential rivals include London Mayor Boris Johnson and Education Secretary Michael Gove.
Cameron believes his decision to publish the draft bill will silence his eurosceptic lawmakers until the next election.
"This is our red line," one senior Conservative source said of the bill. "We're not going to give them any more ground."
Despite his latest concession, up to 100 eurosceptic Conservative members of parliament are still expected to criticize the government's legislative plans on Wednesday because they didn't include a bill promising a vote on EU membership.
Since coming to power in a coalition government three years ago, the Conservatives have been rattled by the popularity of the UK Independence Party (UKIP), which campaigns for Britain's withdrawal from the EU and tighter immigration laws.
A Guardian/ICM poll showed that UKIP's support had surged to a record high of 18 percent, while support for Britain's traditional parties had fallen by 4 percentage points each.
UKIP took a quarter of the vote in local elections this month. Unless Cameron can convince his party he can win the next election he is likely to face more challenges to his leadership.
"With the story changing every day, it's very reminiscent of the old John Major days where, really, the government appears to be being blown around by events," said UKIP leader Nigel Farage.
The Guardian poll put Labor on 34 percent, the Conservatives on 28 percent and the Liberal Democrats on 11 percent.
UKIP's poll rating has climbed steadily since Cameron set out his EU strategy in January.
Cameron's bid to renegotiate the terms of Britain's membership has worried the United States, which has warned London that it would lose influence in the world if it did leave the world's biggest economic bloc.
(Additional reporting by Mohammed Abbas, William James, Costas Pitas and William Schomberg; Writing by Guy Faulconbridge and Andrew Osborn; Editing by Giles Elgood)
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