The UK could "drift towards" exiting the EU if problems are not addressed, David Cameron is set to warn.
The prime minister postponed a long-awaited speech on the UK's relationship with Europe to respond to the hostage crisis in Algeria.
In extracts released in advance, Mr Cameron said he wanted to set out a "positive vision" for the future of the EU in which Britain would play a part.
Meanwhile, President Obama said he wanted a "strong" UK in a "strong" EU.
Mr Cameron had been planning to address an audience of Dutch business leaders, with a speech which would have been closely watched by other European leaders, the business community and supporters and critics within his own party.
But this was postponed after concerns grew about the fate of a number of British hostages being held in a desert gas complex in Algeria. No new date has yet been set for the speech.
'Give consent'Mr Cameron had been expected to set out his vision for the UK's future role in the European Union, including the prospect of a referendum.
The Conservative leader had been under pressure from many of his MPs to give a binding commitment to a vote on Europe when he delivered his speech in Amsterdam.
End QuoteHe and his advisers have been working on it for months. Delivery dates have come and gone. In trying to set out how he sees Britain's place in a changing Europe, he will inevitably disappoint "
Extracts from Mr Cameron's speech released on Thursday night reveal he had intended to set out a "positive vision for the future of the European Union. A future in which Britain wants, and should want, to play a committed and active part".
He planned to stress the EU's structures were undergoing "fundamental change", adding: "There is a gap between the EU and its citizens which has grown dramatically in recent years and which represents a lack of democratic accountability and consent that is - yes - felt particularly acutely in Britain."
"If we don't address these challenges, the danger is that Europe will fail and the British people will drift towards the exit," he was to say.
"I do not want that to happen. I want the European Union to be a success and I want a relationship between Britain and the EU that keeps us in it."
According to Mr Cameron, the austerity measures taken to deal with the crisis in the eurozone have given added urgency to the issue of the EU's democratic legitimacy.
'Duty'"People are increasingly frustrated that decisions taken further and further away from them mean their living standards are slashed through enforced austerity or their taxes are used to bail out governments on the other side of the continent," he was intending to argue.
"And yes, of course, we are seeing this frustration with the EU very dramatically in Britain. Europe's leaders have a duty to hear these concerns. And we have a duty to act on them."
"More of the same," was not the answer Mr Cameron was set to say, adding: "That will make our countries weaker, not stronger."
It also emerged that US President Obama had renewed pressure on Mr Cameron over Britain remaining a member of the European Union. Details of a phone call with the prime minister on Thursday were released by the White House.
A spokesman said: "The president underscored our close alliance with the United Kingdom and said that the United States values a strong UK in a strong European Union, which makes critical contributions to peace, prosperity, and security in Europe and around the world."
Speaking on Wednesday, Mr Cameron suggested the British public would be asked to "give their consent" to any changes that emerge from future negotiations and their verdict would "settle the issue once and for all".
UncertaintyThe prime minister has repeatedly said he does not favour a so-called "in-out" referendum on the UK's membership of the EU, in which people would be asked whether they wanted to stay in the organisation or to leave.
But he has been warned that any referendum - which is unlikely to take place before 2015 and may hinge on the Conservatives winning the next election - could effectively turn into a decision on the UK's future presence within the EU.
Labour has said a commitment to hold a referendum at a future date would cause uncertainty, telling international investors that the UK was "closed for business".
The Lib Dems have also warned of the risks of the UK leaving the EU "almost by accident" and said a concerted push to renegotiate its relationship could cause uncertainty and deter foreign investors at a difficult time for the British economy.
The UK Independence Party, which campaigns for the UK to leave the EU, says Mr Cameron has broken past pledges over European referendums and his approach is designed to paper over divisions within his own party.
The UK insists that it has allies within the EU who share its views on the need to reform institutions and alter the balance of powers between Brussels and national capitals.
But, speaking on Thursday, a spokesman for the Dutch prime minister Mark Rutte suggested other EU nations were unlikely to allow any one country to opt out from "all kinds of arrangements" and the UK was likely to be "disappointed" if it went down that route.
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