George Osborne will today issue a stark warning that failure by the European Union to reform will condemn it to a future of economic crisis and decline.
In a keynote speech, the Chancellor will stress the Conservatives' determination to renegotiate the terms of Britain's membership, declaring "We can't go on like this".
His intervention comes after Euro-sceptic backbenchers shattered the Tory truce on Europe with a call for Parliament to be given a veto over EU legislation.
Ministers were quick to dismiss the plan - set out in a letter signed by 95 Conservative MPs - as "unworkable", warning that it would undermine the single market.
Mr Osborne will however make clear that ministers understood the need for reform of the EU, at a time when Europe is falling behind the rising economic powers of Asia, while its welfare spending outstrips the rest of the world.
He will reiterate David Cameron's pledge that a Conservatives will put the renegotiated terms of Britain's membership to the country in an in/out referendum if they are returned to power at the next general election.
Addressing a conference on EU reform organised by Open Europe and the Fresh Start Project, he will say: "The biggest economic risk facing Europe doesn't come from those who want reform and renegotiation - it comes from a failure to reform and renegotiate.
"It is the status quo which condemns the people of Europe to an ongoing economic crisis and continuing decline. And so there is a simple choice for Europe: reform or decline.
"Our determination is clear: to deliver the reform, and then let the people decide."
Mr Osborne will say that the financial crisis of 2008 had dramatically exposed the the underlying weakness of the European economy.
"We knew there was a competitiveness problem in Europe before the crisis. But the crisis has dramatically accelerated the shifts in the tectonic economic plates that see power moving eastwards and southwards on our planet," he will say.
"Over the last six years, the European economy has stalled. In the same period, the Indian economy has grown by a third. The Chinese economy by 50%. Over the next 15 years Europe's share of global output is forecast to halve.
"Make no mistake, our continent is falling behind. Look at innovation, where Europe's share of world patent applications nearly halved in the last decade. Look at unemployment, where a quarter of young people looking for work can't find it. Look at welfare.
"As (German chancellor) Angela Merkel has pointed out, Europe accounts for just over 7% of the world's population, 25% of its economy, and 50% global social welfare spending."