The Fresh Start group of Conservative backbenchers will throw down the gauntlet to the prime minister, two days before he delivers a key speech.
The intervention comes ahead of Mr Cameron's long-awaited speech in Amsterdam on Friday.
He is expected to set out plans to renegotiate Britain's relationship with Europe, which will then be the subject of a referendum, probably to take place in 2018.
Deputy Prime Minister Nick Clegg warned that Mr Cameron's approach was creating uncertainty about Britain's future in the EU and having a "chilling effect" on jobs and growth.
Last night, senior Downing Street sources welcomed the suggestions made by the group – which claims to have the backing of about 100 Tory MPs – and indicated that the prime minister was sympathetic to returning social and employment laws to Britain.
The 'manifesto' of the Fresh Start group recommends that Britain needs to make four "significant revisions" to the EU treaties:
• The repatriation of all social and employment law – such as the Working Time Directive.
• An opt-out from all existing European policing and criminal justice measures.
• An "emergency brake" on any new European legislation that affects financial services.
Several other changes are also proposed, including reforming the EU budget for agricultural and fishing policy and "repatriating regional policy". This would save British taxpayers more than £4bn (€4.8bn) annually.
On EU social and employment law, Fresh Start is expected to say: "Ultimately we must make the complete repatriation of social and employment law a priority and should not settle for anything less."
The manifesto recommends that the prime minister should be ready to take the "extreme" option of unilaterally ending British participation in EU employment rules if other states do not agree.
The report says: "If negotiation to repatriate these powers failed, we should consider the unilateral disapplication of EU social and employment law in Britain through an Act of Parliament. This is an extreme option and could well result in fines or suspension of obligations from other EU nations. (© Daily Telegraph, London)