Mr Cameron pledged to leave the EPP grouping in his 2005 leadership campaign
David Cameron has come a step closer to fulfilling his pledge that the Tories will leave the centre-right grouping in the European Parliament.
The Conservatives earlier informed the European People's Party (EPP) that they intend to leave it.
The BBC understands they are likely to leave in May and seek to form a new grouping after the European elections.
Labour and the Lib Dems said the decision put the Conservatives on the "fringe" of European politics.
To qualify as a grouping and access EU funding, the Conservatives would have to be joined by MEPs from at least six other countries - it is thought they will try to attract allies from the Czech Republic and Poland among other countries.
Mr Cameron pledged to cut the Conservatives' ties with the EPP grouping during his 2005 Conservative leadership campaign, saying its federalist views were at odds with Tory policy.
But critics had questioned whether he would go through with it - partly because of the difficulty of finding sufficient allies from other countries to join any new group.
On Wednesday shadow Europe minister Mark Francois said he, shadow foreign secretary William Hague and the Tory MEP leader Timothy Kirkhope had met EPP chairman Joseph Daul in Strasbourg.
"The meeting was amicable and during the course of it, we confirmed to Mr Daul our long-standing intention to leave the EPP and establish a new grouping in the European Parliament after the 2009 elections," he said.
The EPP was opposed to the UK having a referendum on the Lisbon Treaty - something the Conservatives campaigned for - and it wants closer economic integration in Europe, as well as common immigration, defence and foreign policy.
BBC Newsnight understands the working name of the new group would be the European Conservatives.
For Labour, Europe minister Caroline Flint warned that the Conservatives could put the UK "on the fringe of Europe" and undermine businesses.
"William Hague needs to come clean on who he has invited to join the Tories' fringe group in Europe, who has already turned him down and who he will pledge never to work with," she said.
For the Liberal Democrats, Edward Davey said it put the Tories "on the lunatic fringe of European politics".
"The Tories now have the most isolationist foreign policy of any modern opposition party, just at a time when countries need to be working more closely than ever. The Conservatives are choosing to look inwards rather than outwards.
"What must the likes of President Obama - or even Kenneth Clarke - think when they are cold-shouldering Europe's mainstream?"