Vince Cable is to urge David Cameron not to take a "dangerous gamble" with the national interest as the Liberal Democrats mount pressure over Europe.
On the eve of the Prime Minister's expected announcement of a future referendum on UK membership of the European Union (EU), he will reinforce warnings the strategy risks damaging economic recovery.
Any effort to negotiate large-scale exits from existing EU powers would make it "next to impossible" to safeguard Britain's best interests in the single market, he will suggest.
He will also draw a direct link between the present debate and the surge in popularity for the UK Independence Party (Ukip) with the issue of immigration and the risks of 1930s-style nationalism.
Mr Cameron makes his long-awaited speech in the Netherlands on Friday where he will set out plans to seek the "fresh consent" of the British people after negotiating a new settlement.
He has been at the centre of a growing storm within his own party over Britain's future in Europe and relations with Liberal Democrat coalition colleagues are strained.
The Business Secretary will echo warnings by his party leader, Deputy Prime Minister Nick Clegg, that uncertainty over the future will have a "chilling effect" on the already-fragile economy.
Addressing businessmen in Oxfordshire, he will say: "Any reopening the whole question of British membership creates additional uncertainty at a time when there is already fragile economic confidence in the wake of the financial crisis.
"This uncertainty is potentially driving away investors and the jobs they create," he will say - adding that he had never met a major British exporter who would prefer the UK to be outside the EU.
"I make this point as a minister who has to persuade Asian and US investors to take Britain seriously and create employment here rather than elsewhere."