It is generally believed Britain's membership of the European Union is a good thing. But the, at times divisive, debate over joining the euro and fears about the consequences of EU enlargement have led to this assumption being challenged.

The likelihood is that as Britain takes over the EU presidency in the second half of this year and the argument over the EU constitution heats up, the benefits of membership will come under greater scrutiny.

There have already been challenges to the wisdom of Britain's membership, including from Civitas, a right-leaning think-tank, which argued last year that membership amounted to a net cost of 4 per cent of the UK's economic output, equivalent to £40bn annually.

Another critic, Professor Patrick Minford of Cardiff Business School, identifies "unacceptably high" ongoing costs of 3.2 to 3.7 per cent of gross domestic product in a book to be published this year. Assuming the EU would impose the same trade barriers it levies on non-members, he concludes "the UK would be considerably better off" leaving the EU.

However, a separate study by Brian Hindley and Martin Howe - "Better Off Out?" - for the Institute of Economic Affairs found a net economic cost to Britain of withdrawal, albeit a small one of less than 1 per cent of gross domestic product.

Estimating the costs and benefits of EU membership is fraught with difficulty because of the need to make the comparison with Britain's economic circumstances had it not been a member. While the studies attempt to do this they inevitably involve making assumptions that may not be universally shared.

The consensus is that Britain has gained enormously from the EU. The main political parties are united in supporting membership as are business organisations, such as the Institute of Directors, the CBI and the British Chambers of Commerce.

The Tory party, which opposes the EU constitution and euro adoption, accepts the widely-quoted findings of a European Commission report that the EU's GDP in 2002 was 1.8 percentage points, or €164.5bn, higher than it would have been thanks to the single market.

The debate about costs and benefits centres on three big-ticket items: trade with the EU, the common agricultural policy and foreign direct investment. It is usually assumed Britain gains from free trade and foreign direct investment but loses out in terms of the CAP.

The biggest perceived benefit of Britain's EU membership is tariff-free access to more than 450m people in 25 countries - the world's largest single market.

Against that gain has to be set the costs of establishing a single market through harmonisation which requires members to have the same minimum technical standards and product safety.

For Ray Barrell, of the National Institute of Economic and Social Research, the two are inextricably linked. He estimates EU membership has raised UK GDP by 3 to 5 per cent, equivalent to about £35bn- £60bn, with most of the gain derived from increased competition rather than free trade.

He said: "The common regulatory framework and the enforcement of common technical standards has been important in increasing competition. The design of new regulations strongly affects the distribution of benefits. To be outside means to give up the chance of influencing developments and facing unfavourable regulation."

Norway, for example, is outside the EU but has low-tariff access to the single market. In exchange, it contributes to the EU budget but has no say over the drafting of regulations.

Mr Barrell accepts that these gains have to be offset against the cost of the CAP. The net cost to Britain of the CAP is the difference between the costs the policy imposes on taxpayers and food purchasers, and the gains of the farmers. For Britain, this amounted to a net cost of £4.5bn in 1998.

The CAP is the main reason why Britain pays more into the EU than it gets back, even with the rebate negotiated by Margaret Thatcher in 1984. According to the Foreign Office in a guide to the EU published last month, over the past five years Britain has paid on average about £120 per person per year to the EU.

But the Foreign Office estimates that the gains from EU membership are greater - at nearly £300 per person from access to the single market alone.

Ian McCafferty, chief economist of the CBI employers' organisation, believes the main beneficiary of EU membership has been the consumer, who has enjoyed a range of products and services at competitive prices.

These include low-cost airlines, which emerged with the liberalisation of air travel across Europe, the development of financial services and - notwithstanding the recent rise in energy costs - lower electricity prices.

Businesses worry that the EU is not moving quickly enough to reform and to tackle costly regulation, according to Accenture, the professional services firm.

In a recent survey of 451 business leaders, it found only 32 per cent thought EU membership had benefited their business, down from 75 per cent in 1998. Yet a large majority wanted more integration in Europe and fewer differences between national tax systems.

"We infer that businesses have already seen a lot of benefit from EU membership and in wanting the next stage of benefits they have set the bar higher," said Mark Purdy, Accenture consultant. "They do not want more legislation but more consistency in regulations, more labour mobility and more integration."

The difference of opinion about the costs and benefits of EU membership suggest that any thought of leaving the EU, in preference to stepping up the pace of internal reform, would be a hugely risky step to take.