The euro zone crisis is creating a two-track European Union, and Britain's position in the outer tier should give it the freedom to opt out of onerous rules and protect its national interests, the head of Britain's top business lobby group said.

The comments from Confederation of British Industry Director General John Cridland will add fuel to the debate over Britain's position in Europe on the day that British Prime Minister David Cameron travels to Germany to meet German Chancellor Angela Merkel to discuss the currency zone's woes.

In an interview with Reuters ahead of the CBI's annual conference on November 21, Cridland stressed that Britain should remain at the heart of the single market and keep its place at the negotiating table of the 27-state European Union.

But he singled out the EU Working Time Directive, which Brussels wants to renegotiate, as one item of regulation that Britain should have the power to drop because it does not suit the needs of workers or employers.

These things affect us and we need to be at the table, that doesn't mean in the new Europe that a solution for Britain has to be identical to a solution for everybody else, Cridland said.

If you want to go ahead with some changes to the Working Time Directive. Can we just bring this issue to a close? You do it and we won't.

He said a post-crisis Europe should leave behind the idea of 'one-size-fits-all' rules in favour of a 'patchwork' of options that suit countries' needs, echoing remarks made by Cameron in a speech this week.

It's a practical example of what the Prime Minister was talking about: being good European citizens, not blocking things that others want to do, but saying in return, we're slightly different, we have a different national interest.

XMAS LIST

Britain has been encouraging euro zone countries to forge ahead with greater fiscal integration because a break-up of the monetary union would have disastrous consequences for the UK.

Britain does almost half its trade with the euro zone and the crisis has brought the UK to the brink of another recession.

The gloomy prospects prompted the Bank of England to restart its quantitative easing programme last month. The central bank slashed its growth forecasts this week and flagged policymakers may have to inject more stimulus before too long.

But Cridland, who had been against October's decision, expressed scepticism about the effectiveness of the policy. He said Britain's fate depended on Germany acting to resolve the euro zone crisis, as well as on UK finance minister George Osborne coming up with a plan to boost growth.

It's a little bit of a leap of faith, isn't it? The Bank says QE1 added 1.5 to 2 percent to GDP ... but they can't say exactly where the money went and they can't say what it did.

If Chancellor Merkel gave us a great Christmas present, then we might not need further batches of QE, he said.

(Additional reporting by Adrian Croft; Editing by Susan Fenton)