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Britain's membership of the European Union is "crucial" to London's future success, and an exit from the political bloc will hit the UK's competitiveness and jobs, a major business group has warned.

A new report for London First said that the UK could not take an "a la carte" approach to being in the European Union and rubbished suggestions that Britain could remain a member while picking and choosing parts of the EU package.

The report comes as investment managers warned about the impact to the UK's tax revenue if Britons vote to leave the European Union in the referendum promised by prime minister David Cameron for 2017.

London First's report was drawn up by a panel of business leaders including HSBC chief executive Alan Keir, Barclays vice-chairman Cyrus Ardalan, the chairman of law firm Linklaters Robert Elliott and Nomura vice-chairman Sir Andrew Cahn.

The London and the EU report found that the business community in the capital is "committed to remaining within the EU, in large part because of the economic benefits of the Single Market, and sees great opportunities for Britain to lead a deepening of that market to drive jobs and growth across the country".

Unlike New York and Hong Kong, London does not have a large domestic market, meaning that being at the heart of the European single market is "a crucial part of its success", it said.

"Business wants the UK government to take a more engaged role within the EU, in order to drive economic growth and competitiveness, and champion the Single Market," said the report.

Breaking down barriers to the free movement of services was key to London's future development and most likely to happen if the UK was part of the EU.

"The opportunity for London, and British, business is not to threaten exit, but to drive the completion of the Single Market in services and make EU membership work even better in the UK's interests, while vigorously implementing a programme to mitigate adverse social and income distribution effects that undermine the success of the whole," said the report.

"Realising the benefits of the Single Market means accepting its framework as a package: the four freedoms are not 'a la carte'; states cannot pick and choose which best suit their interests as the freedoms work together to create an internal market.

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EU Membership 'Crucial' To UK Success, Say Business Leaders