Mr Cameron has faced pressure to hold a referendum on Europe and has been criticised by some in his own party for not doing more to get powers back from the EU to the UK.
In his speech, which was expected before Christmas, he is expected to support a loosening of the UK's relationship with the EU, to be endorsed by a referendum.
Mr Cameron told MPs the "massive changes" taking place in Europe following the eurozone crisis allowed the opportunity for countries to renegotiate a better relationship with Europe.
He said there was now a choice about how to respond: "Do we look at these changes and see what we can do to maximise Britain's national interest and do we consult the public about that, or do we sit back, do nothing and tell the public to go hang?"
But Mr Miliband said the promise of a referendum in five years' time could jeopardise the UK's business prospects and lead to "five years of businesses seeing a closed-for-business sign hanging around Britain".
He said: "What business wants in Europe is what I want in Europe - for us to be part of Europe but a more flexible Europe, a more competitive Europe, a Europe that can take on the challenge of the global race and the rise of nations in the south and the east."
He said Labour was afraid of debating the issue of Europe and warned that it would be dangerous for Britain to "bury our head in the sand" and pretend there was no debate happening about Europe.
"The most dangerous thing for this country would be to see the changes that are taking place in Europe, because of the single currency, and stand back and say we're going to do nothing about it.
Ahead of Mr Cameron's speech, a group of Conservative backbench MPs has published a report calling for a substantial return of powers to the UK from the European Union.
"What Britain should be doing is getting in there, fighting for the changes we want so then we can ask for the consent of the British people to settle this issue once and for all," he said.
And critics have already warned that the uncertainty caused by the prospect of a future referendum would jeopardise the UK's business prospects.
'Gamble'
Deputy Prime Minister Nick Clegg has said "a prolonged period of uncertainty" over Britain's relationship with Europe could have a "chilling effect" on jobs.
Ahead of Mr Cameron's speech, a group of Conservative backbench MPs has published a report, welcomed by the foreign secretary, calling for a substantial return of powers to the UK from the European Union.
Fresh Start, which says it is backed by more than 100 Tory MPs, wants the UK to remain in the union, but with "significant revisions" to treaties - including the return of control over all social and employment law.
However, Ken Clarke, a veteran pro-European, who attends the cabinet as a minister without portfolio, told the Financial Times that any referendum would be a "gamble" that could lead to the UK leaving the union.
During the exchanges in the Commons, both leaders sent their condolences to the families affected by the helicopter crash in London on Wednesday morning and paid tribute to the quick response of emergency services.
Kate Hoey, MP for Vauxhall where the helicopter crashed, asked the prime minister whether London's changing skyline meant "where and how and why helicopters fly through our central city" needed to be looked at.
The prime minister said he was sure the rules would be looked as part of the investigations into the crash.
