By Kylie MacLellan
LONDON (Reuters) - British Prime Minister David Cameron will challenge on Wednesday a suggestion by Eurosceptics that Britain would be better off leaving the European Union and agreeing a looser, Norwegian-style relationship with the bloc.
So far the British leader had avoided public involvement in the arguments for leaving or staying in the EU that will be put to a referendum by the end of 2017; but with opinion polls showing falling support for the EU, Cameron has clearly decided to take on the Eurosceptics directly.
Cameron, seeking to renegotiate terms of Britain's EU membership, says he wants to stay in a reformed EU but rules nothing out if he cannot get change on such matters as free movement of labor.
He will use a trip to a Northern Future Forum in Iceland on Wednesday to directly address one of the proposed alternatives to EU membership.
"A number of senior Vote Leave members say being part of the European Economic Area, like Norway, is 'the only realistic option' should the UK leave the EU," a source in Cameron's office said ahead of the trip.
"(The Prime Minister) believes it is important to highlight the questions Britain would face if it left the EU and followed Norway's model."
Norway, along with Iceland and Lichtenstein, is not an EU member but has access to the bloc's single market. It accepts the EU's principles of freedom of movement of goods, services, capital and people as well as rules governing, among other things, employment law and competition. It also contributes money to the EU.
The source said Cameron would highlight five key questions those advocating this model must answer, including whether Britain would have any say over how EU rules are set, whether it would have to pay money to the EU, and whether it would be subject to freedom of movement rules.
Immigration is a top concern among British voters and a key element of the debate over remaining in the EU. Cameron plans to restrict EU migrants' access to welfare payments in Britain.
"Unlike Britain, Norway has no votes and negligible say over the rules governing free movement, like EU migrants' access to benefits. So how would becoming like Norway in anyway help addressing public concerns over EU migration?," the source said.
Cameron will use the meeting, which will be attended by the leaders of Iceland, Estonia, Latvia, Lithuania, Denmark, Finland, Norway and Sweden, to discuss his EU reform plans.
Writing in the Guardian newspaper, former Norwegian foreign minister Espen Barth Eide said Norway's model was not suitable for Britain.
"You can’t have your cake and eat it too," he said.
"For the UK, a major country and a long-standing, influential member of the EU, voluntarily to choose to move out of the core and into the outer circle, in order to join those influenced by but not influencing Brussels, would in my view be an entirely different matter."
(Reporting by Kylie MacLellan; editing by Ralph Boulton)