What is happening?

UK Prime Minister David Cameron has announced a referendum on whether Britain should remain in the European Union to be held on Thursday 23 June.

What is a referendum?

A referendum is basically a vote in which everyone (or nearly everyone) of voting age can take part, normally giving a "Yes" or "No" answer to a question. Whichever side gets more than half of all votes cast is considered to have won.

What is the European Union?

The European Union - often known as the EU - is an economic and political partnership involving 28 European countries (click here if you want to see the full list). It began after World War Two to foster economic co-operation, with the idea that countries which trade together are more likely to avoid going to war with each other. It has since grown to become a "single market" allowing goods and people to move around, basically as if the member states were one country. It has its own currency, the euro, which is used by 19 of the member countries, its own parliament and it now sets rules in a wide range of areas - including on the environment, transport, consumer rights and even things like mobile phone charges. Click here for a beginners guide to how the EU works.

What will the referendum question be?

The question is always crucial in any referendum. The Electoral Commission proposed the wording, which has been accepted by MPs: "Should the United Kingdom remain a member of the European Union or leave the European Union?" Read more: Does the wording of a referendum question matter?

Who will be able to vote?

British, Irish and Commonwealth citizens over 18 who are resident in the UK, along with UK nationals who have lived overseas for less than 15 years. Members of the House of Lords and Commonwealth citizens in Gibraltar will also be eligible, unlike in a general election. Citizens from EU countries - apart from Ireland, Malta and Cyprus - will not get a vote.

How will you vote?

It will be a similar system to that during other elections. Firstly, if you have registered to vote, you`ll be sent a card telling you when voting takes place and where you should go to vote on 23 June. On that day, when you go to the polling station you will be given a piece of paper with the referendum question on it. You then go to a booth, which will have a pencil in it for your use. You then put a X in the box which reflects your choice and put the paper into a ballot box. Alternatively you will also be able to opt to vote by post. Read more: Electoral Commission`s guide to applying to vote by post.

What are the main changes David Cameron has agreed?

Mr Cameron agreed a package of changes to the UK`s membership of the EU after two days of intensive talks with other member states` leaders in Brussels in February. The agreement, which will take effect immediately if the UK votes to remain in the EU, includes changes to:

Child benefit - Child benefit payments to migrant workers for children living overseas to be recalculated to reflect the cost of living in their home countries

Migrant welfare payments - The UK can decide to limit in-work benefits for EU migrants during their first four years in the UK. This so-called "emergency brake" can be applied in the event of "exceptional" levels of migration, but must be released within seven years - without exception.

Eurozone - Britain can keep the pound while being in Europe, and its business trade with the bloc, without fear of discrimination. Any British money spent on bailing out eurozone nations will be reimbursed.

Protection for the City of London - Safeguards for Britain`s large financial services industry to prevent eurozone regulations being imposed on it
Sovereignty - There is an explicit commitment that the UK will not be part of an "ever closer union" with other EU member states. This will be incorporated in an EU treaty change.

`Red card` for national parliaments - It will be easier for governments to band together to block unwanted legislation. If 55% of national EU parliaments object to a piece of EU legislation it may be rethought.

Competitiveness - The settlement calls on all EU institutions and member states to "make all efforts to fully implement and strengthen the internal market" and to take "concrete steps towards better regulation", including by cutting red tape.

Some limits on free movement - Denying automatic free movement rights to nationals of a country outside the EU who marry an EU national, as part of measures to tackle "sham" marriages. There are also new powers to exclude people believed to be a security risk - even if they have no previous convictions.

How does that differ from what he wanted?

Mr Cameron had originally wanted a complete ban on migrants sending child benefit abroad but had to compromise after some eastern European states rejected that and also insisted that existing claimants should continue to receive the full payment.

On how long the UK would be able to have a four-year curb on in-work benefits for new arrivals, Mr Cameron had to give way on hopes of it being in place for 13 years, settling for seven instead.

On financial regulation, a clause was inserted "to ensure the level-playing field within the internal market". This was in response to French fears that Britain was seeking special protection for the City of London that would have given it a competitive advantage.

Critics argue that the final deal falls well short of what Mr Cameron originally promised when he announced his plan for a referendum, particularly when it comes to returning powers from Brussels. It is not clear, for example, if the "red card" for national parliaments would ever be triggered in practice.

But most of the points in the draft agreement, with the exception of those mentioned above, have survived unchanged into the final deal. Read more: What Cameron wanted v what he got

Why is a referendum being held?

Britain had a referendum in 1975 shortly after it had joined the EU, or the Common Market as it was then called. The country voted to stay in then but there have been growing calls, from the public and politicians, for another vote because, they argue, the EU has changed a lot over the past 40 years, with many more countries joining and the organisation extending its control over more aspects of daily lives. David Cameron initially resisted these calls but in 2013 he changed his mind.

Who wants the UK to leave the EU?

The British public are fairly evenly split, according to the latest opinion polls. The UK Independence Party, which won the last European elections, and received nearly four million votes - 13% of those cast - in May`s general election, campaigns for Britain`s exit from the EU. About half of Conservative MPs, including five cabinet ministers, several Labour MPs and the DUP are also in favour of leaving.

Why do they want the UK to leave?

They believe Britain is being held back by the EU, which they say imposes too many rules on business and charges billions of pounds a year in membership fees for little in return. They also want Britain to take back full control of its borders and reduce the number of people coming here to work. One of the main principles of EU membership is "free movement", which means you don`t need to get a visa to go and live in another EU country. They also object to the idea of "ever closer union" and any ultimate goal to create a "United States of Europe".

Who wants the UK to stay in the EU?

David Cameron wants Britain to stay in the EU, now he has got some powers back from it. Sixteen on his cabinet also back staying in. The Conservative Party has pledged to be neutral in the campaign - but the Labour Party, SNP, Plaid Cymru and the Lib Dems are all in favour of staying in. As mentioned above, according to polls, the public seems pretty evenly split on the issue.

Why do they want the UK to stay?

They believe Britain gets a big boost from EU membership - it makes selling things to other EU countries easier and, they argue, the flow of immigrants, most of whom are young and keen to work, fuels economic growth and helps pay for public services. They also believe Britain`s status in the world would be damaged by leaving and that we are more secure as part of the bloc.

So would Britain be better in or out?

It depends which way you look at it - or what you believe is important. Leaving the EU would be a big step - arguably far more important than who wins the next general election - but would it set the nation free or condemn it to economic ruin? Here is a rundown of the arguments for and against.

What about businesses?

Big business - with a few exceptions - tends to be in favour of Britain staying in the EU because it makes it easier for them to move money, people and products around the world. BT chairman Sir Mike Rake, a recent CBI president, says there are "no credible alternatives" to staying in the EU. But others disagree, such as Lord Bamford, chairman of JCB, who says an EU exit would allow the UK to negotiate trade deals as our country "rather than being one of 28 nations". Many small and medium-sized firms would welcome a cut in red tape and what they see as petty regulations. The British Chambers of Commerce says 55% of members back staying in a reformed EU.

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