Labour backs EU referendum
Acting leader of the Labour party Harriet HarmanReuters

Acting Labour party leader Harriet Harman said that the party will now back a referendum on whether to remain in the European Union by the end of 2017.

Speaking in the Sunday Times, Harman said Labour had changed its position after it "reflected on the conversations we had on doorsteps".

However, she told the BBC's Andrew Marr Show the party would still campaign for the UK to stay in the EU.

She said: "Whether we are in the European Union or not is a huge, important, constitutional, political, economic decision."

Harman added: "There just does not seem to be the public appetite for us to man the barricades against a referendum that appears inevitably going to happen. We will vote for the bill and then get into the big questions for and against Europe."

Prime Minister David Cameron has pledged to renegotiate Britain's ties with the EU ahead of an "in/out" referendum in two years' time.

The party opposed the PM's plans under the leadership of former Labour leader Ed Miliband, but following the heavy defeat in the 2015 general elections, it has decided to change tack.

Nearly half of the trade in the UK was from within the EU and it remained the country's largest export market, according to the article, and UK membership of the EU amounted to 4% for 5% of GDP.

Pascal Lamy, head of the Notre Europe think-tank, said Cameron should be positive about the EU during the referendum campaign.

The former director general of the World Trade Organisation told the BBC: "Most European leaders, including myself, feel David Cameron needs to be able to make a good case for Europe in the referendum.

"He himself must make a pro-EU case in the UK, which frankly hasn't been done for the last 15 years. There has to be some change to the UK narrative, which will probably be the price for a compromise."