LONDON (Reuters) - A British exit from the European Union would be a dreadful decision that would cost billions of pounds and leave the world's sixth largest economy isolated, former Prime Minister John Major was quoted as saying on Friday.
Prime Minister David Cameron has promised to try to renegotiate the terms of his country's EU membership before holding an "in-out" referendum if re-elected in 2015, which could lead to Britain dropping out of a club it joined in 1973.
Major, who served as prime minister from 1990 to 1997, backed attempts to renegotiate Britain's EU ties but said the government needed to be realistic about what it could achieve.
In a speech to business leaders at the Institute of Directors, Major said Britain would pay a severe price if it left the EU.
"In a world of seven billion people, our island would be moving further apart from our closest and largest trading partners, at the very time when they, themselves, are drawing closer together. This makes no sense at all," he said.
"The EU would be diminished. The UK would be isolated. I am no starry-eyed Europhile but it would be a lose/lose scenario: a truly dreadful outcome for everyone," he was quoted as saying in the Daily Telegraph newspaper.
Rows over Europe convulsed the Conservative Party in recent decades and played a part in the downfall of both of Cameron's Conservative predecessors, Major and Margaret Thatcher.
Last month Major said the Conservative Party could lose the next election if they continued to argue about EU membership.
In the speech to business leaders, Major said if Britain left the EU, it would lose foreign investment, jobs and prestige. Outside the EU, it might have to pay for access to the single market and have to implement EU regulations without any ability to influence them, he said.
"Of course, we would survive, but there would be a severe price to pay in economic well-being, in jobs and in international prestige," Major said.
(Reporting By Freya Berry; Editing by Guy Faulconbridge and Elizabeth Piper)