DAVID Cameron has warned eurosceptics that the “Norwegian path” of being outside the European Union with a looser economic relationship would leave Britain paying the same bill to Brussels but with no say around its table.

The Prime Minister, now attending a two-day Northern Future Forum summit in Reykjavik with Baltic and Nordic counterparts, where he will discuss his EU reform agenda, told MPs that “no options are off the table” and that if he did not get what he wanted in the renegotiation, then nothing was ruled out, ie including leaving the EU.

But he also said: “Some people, arguing for Britain to leave the European Union, although not all of them, have pointed out a position like that of Norway as a good outcome. I would guard strongly against that.

“Norway pays as much per head to the EU as we do and takes twice as many migrants per head as we do in this country but has no seat at the table and no ability to negotiate. I am not arguing that all those who want to leave the EU say that they want to follow the Norwegian path but some do and it is very important that we are clear in this debate about the consequences of these different actions.”

Both Iceland and Norway are outside the EU but are part of the European Economic Area, which gives them access to the single market. However, in return they have to abide by EU rules and contribute money to Brussels' coffers; in the case of Norway, this is more than £430 million a year.

Mr Cameron will have talks with the leaders of both Iceland and Norway at the Forum, a grouping which also includes EU members Denmark, Estonia, Finland, Latvia, Lithuania and Sweden.

Sigmundur Gunnlaugsson, Iceland's premier, suggested a looser relationship with the EU "might be better for the UK".

Dominic Cummings, director of the Vote Leave campaign, said his group did not support the "Norway option" for the UK if the public backed severing ties with Brussels in the in-out referendum promised by Mr Cameron by the end of 2017.

"After we vote leave, we will negotiate a new UK-EU deal based on free trade and friendly co-operation," said Mr Cummings.

Will Straw, executive director of the Britain Stronger In Europe campaign, said: "One by one, the alternatives to Britain's EU membership are falling apart. We'd still pay but would lose our say over many rules, including free movement."

Hilary Benn, the Shadow Foreign Secretary, said: "David Cameron is now waking up to the huge risks of stumbling out of the EU rather than posturing to try and keep his backbench MPs happy.”

Ukip’s Douglas Carswell, said Norway had a “duff deal” and that once Britain voted No to EU membership, it could get a much better one.

Former Tory Chancellor Lord Lawson, President of the Conservatives for Britain group, said it was disappointing that Mr Cameron was “resorting to talking down Britain's chances of getting a good deal outside the EU”.

Meantime, the SNP’s Angus Brendan MacNeil decried Mr Cameron’s “grandstanding” about the EU referendum and said it was sad that Scotland, as the most northerly of the UK countries to the Nordic neighbours, was not represented at the Forum “in her own right”.