Boris Johnson says David Cameron's arguments for staying in EU are 'wildly exaggerated'

The Mayor of London has decided to campaign to leave the European Union

Mr Johnson is one of the favourites to succeed Mr Cameron when he steps down (AFP)

Boris Johnson has dismissed arguments made by David Cameron about leaving the EU as “scaremongering” and “wildly exaggerated”.

The Mayor of London was taking questions in the London Assembly the day after he announced he would campaign to leave the European Union and secure a new relationship with the continent.

Told by assembly members that the Prime Minister had warned Brexit would be a “leap in the dark”, he said previous predictions of calamity from resisting European integration had not come through.

“I genuinely think those fears are wildly exaggerated. Those are the arguments that we have heard time and time again - we heard it before, I remember hearing it in 2008 when the financial markets crashed, everybody said that the banks were all going to leave London,” he told AMs.

“It didn't turn out to be true, on the contrary the City of London is overwhelmingly the preponderant financial centre here in this part of the world, indeed it is the biggest on earth.

“It has a conglomeration of skills and a huge, huge range of talents that I don't think would be jeopardised at all.

"I think there will be arguments both ways and you will certainly hear, in the next few months, all sorts of people scaremongering and you will hear people saying that we can't survive outside Europe."

The bookies Paddy Power named Mr Johnson as the new favourite for next Prime Minister this morning, down from 3/1 to 5/2. This is the first time the Chancellor George Osborne has not been bookies’ favourite.

Defence Secretary Micahel Fallon, who is campaigning to remain in the EU, this morning said Mr Johnson’s support for “out” had been expected.

The Cabinet minister downplayed the significance of the move and warned that Britain could not restore a “golden age” of national sovereignty by leaving the EU.

He described such self-government as an “illusion”.

This weekend Mr Cameron announced that Britain would hold its in-out referendum on membership of the European Union on 23 June of this year.

The vote follows a renegotiation of the terms of membership of the EU by the Prime Minister.

The PM has granted his Cabinet colleagues permission to campaign on opposite sides of the referendum – an unusual approach to government collective responsibility.