Britain cannot stay in European Union, Home Secretary Theresa May warns Home Secretary ranges beyond law and order brief with attack on red tape Claims Brussels rules are holding the economies of member states back Warns politicians who want to stay in unreformed EU are 'wrong' Cameron promises to claw back powers before in-out referendum in 2017 May also issues plea to MPs to back the European Arrest Warrant Britain should leave the European Union unless it changes, Theresa May has warned. The Home Secretary said politicians who argue that the UK is better off in the EU 'whatever the terms, are wrong'. Ranging beyond her law and order brief - in a move likely to fuel speculation about her leadership ambitions - Mrs May also warned red tape and regulations from Brussels is holding back the UK economy. Home Secretary Theresa May has warned Britain cannot stay in the European Union at any cost Mrs May faces a major test in the Commons tomorrow when she urges Tory MPs not to vote against plans to sign Britain up to the European Arrest Warrant. She insisted that the way it operates now is 'fairer' but it is still 'every bit as effective when it comes to protecting the public from serious crime and terrorism'. Politicians who argue that we are better off in the EU, whatever the terms, are wrong Home Secretary Theresa May But writing in the Sunday Telegraph, Mrs May made a wider plea for major reforms to the way the EU operates to work in the UK's interests. She said: 'While access to the world's biggest single market is in our national interest, the EU's rules and regulations hold back not just our economy, but also the economies of every other member state. That is why we need to argue for changes that make the EU more competitive, more outward-looking and more open to global trade. These are the reasons I believe that the politicians who argue that we are better off in the EU, whatever the terms, are wrong. But I also believe that the politicians who argue that we are better off out, whatever the terms, are also wrong. Because if we can make Europe work differently - if we can work towards a more flexible union of sovereign member states who use treaties and institutions to trade freely and co-operate in the fight against crime and terrorism - it will surely be in our national interest to remain members of the European Union. David Cameron has promised to renegotiate Britain's membership of the EU before holding an in-out referendum by 2017 Mrs May also issued a direct plea for MPs to back the EAW. Tory backbencher David Davis accused Mrs May of 'scaremongering' with her claims the European Arrest Warrant (EAW) would lead to Britain becoming a 'honeypot' for fugitives. The Tory leadership face a revolt from dozens of Tory MPs,who could defy the party leadership to oppose the measure because of concerns that it is too easy for UK citizens to be extradited on relatively minor charges to countries where they may have no guarantee of a fair trial. David Cameron has promised to renegotiate Britain's membership of the EU before holding an in-out referendum by 2017. Efforts to secure concessions from Brussels were undermined by a shock demand for an extra £1.7billion from Britain last month. On Friday Chancellor George Osborne boasted that he had halved the bill to £850million. But critics accused him of 'smoke and mirrors', by bringing forward a rebate payment from 2015 which was always going to be paid. Critics have claimed the reduction in the £1.7 billion bill had been achieved by bringing forward a rebate to which the UK would have been entitled anyway.