A British exit from the European Union would cause a "serious economic shock", according to a report by the Confederation of British Industry.
The study, carried out by accountancy firm PwC, claimed that a Brexit could cost the country as much as £100bn and 950,000 jobs by 2020, with a vote to leave having “negative echoes” for many years.
Under post-Brexit scenarios assessed in the report, UK living standards, GDP and employment would be significantly reduced compared with staying in the EU.
The report suggests that even in a scenario where a Free Trade Agreement with the EU is secured rapidly, UK GDP could be 3% lower by 2020.
GDP per household in 2020 could be between £2100 and £3700 lower, and the UK’s unemployment rate between 2-3% higher, than if the UK had remained in the EU.
GDP growth in the years 2017-2020 could be seriously reduced – and possibly be as low as zero in 2017 or 2018.
The CBI also said savings from reduced contributions to the EU's budget and regulation would be greatly outweighed by the negative impact on trade and investment.
Last week a report by the Centre for Economic Performance at the London School of Economics said that Ireland would be the worst affected by any British exit from the EU.
Commenting on the report, CBI Director-General Carolyn Fairbairn said: “This analysis shows very clearly why leaving the European Union would be a real blow for living standards, jobs and growth.
“The savings from reduced EU budget contributions and regulation are greatly outweighed by the negative impact on trade and investment.
“Even in the best case this would cause a serious shock to the UK economy,” she added.
The CBI, which has said it will promote the economic case for Britain to remain in the EU, has been criticised by anti-EU campaigners who say the business community is split on the issue.
Two hecklers interrupted a speech by Prime Minister David Cameron at a CBI conference in November, when they unfurled a banner reading "CBI - Voice of Brussels".
In its defence, the CBI last week published research showing that 80% of its members wanted to stay in the EU, while just 5% thought leaving the bloc would help them.
Britons will vote in an in-out referendum on 23 June and are more equally divided than business, opinion polls show, with about 40% on either side and about 20% undecided.