The Foreign Secretary spoke amid concerns the PM is not trying to win back enough powers to satisfy eurosceptics and will campaign to remain in the EU regardless of the outcome of the renegotiation, although Mr Cameron has insisted he may yet advocate leaving.
At the Conservative Party conference in Manchester, Mr Hammond said: “Let’s not forget the EU Referendum Bill, published, as we promised, in the very first week of this Parliament, sending a clear message that Britain expects a fair deal that delivers genuine and irreversible change in Europe.
“It’s got to be a deal that will stand up to the toughest scrutiny of all – the verdict of the British people in that referendum.”
Mr Hammond said the renegotiation would be “hard graft” as he insisted Britain would say an “emphatic no” to over-regulation of business, seek to restrict benefits for EU citizens and seek to drop or reform the commitment to “ever closer union”.
The Foreign Secretary went on: “We will secure a deal because our European neighbours understand the value Britain adds to the EU and that keeping us there requires real change.
“A package that both addresses the British people’s concerns and delivers the reform that puts Europe on course for success.
“Because if we’re going to be part of it, we need a Europe that’s fit for the 21st century – a Europe that acts as a turbo-charger on the British economy, not a drag anchor, a Europe that works for Britain, not against it.”
Education Secretary Nicky Morgan said she was “confident” the Prime Minister would secure a good deal from the renegotiations.
Asked if could see herself campaigning to leave the EU, she told a meeting on the fringes of the conference: “Personally not. I completely understand why people get frustrated.”
Mr Cameron acknowledged that he cannot “guarantee” that his current renegotiation of the UK’s relationship with the EU will deliver a deal allowing him to campaign for continued membership in the referendum due by the end of 2017.
He made clear again that he does not rule out campaigning for Brexit if he does not get the deal he wants on issues such as restricting benefits for EU migrants, securing control over Britain’s borders and giving national parliaments more power in Brussels.
And he accepted that some Tory eurosceptics – including former environment secretary Owen Paterson – will want the UK to quit the EU regardless of how good a deal he negotiates.
The Prime Minister said it was too early to reveal whether Cabinet ministers will be allowed to campaign on opposing sides in the referendum, but said that all members of his team were “signed up” to the renegotiation process.
Asked whether his premiership would be a failure if it ended with the UK leaving the EU, Mr Cameron told BBC1’s Andrew Marr Show: “No, what will be important will be getting the right deal. If I can get the right deal, that will be a success and then it will be up to the British people to decide whether they agree with my success.
“In the end, it is going to be for the British public to decide and, frankly, if I can’t get the things that Britain needs, then I don’t rule anything out in terms of the role that I would play because we do need these changes.”
He added: “I’m involved in a negotiation, I’m trying to get for Britain the things that we need. Obviously, once we have got them, then I will turn around and make the case for staying in a reformed Europe.
“But right now I am fighting to get these things and I can’t guarantee I will get them.”
Regarding the possibility of a free vote for his Cabinet, Mr Cameron said: “The time to make that decision is when I have completed the negotiation.
“If you are a member of my Government, then you have signed up to the process of renegotiation and referendum and you have signed up to the belief that we can deliver a successful renegotiation. Everyone has signed up to that.”
He added: “There are some people who want to leave the EU and I suspect in Owen (Paterson)’s case have always wanted to leave the EU.
“There is nothing I am going to bring back that will satisfy those people.”
Tory grandee Lord Heseltine said he did not believe Mr Cameron would ever campaign to leave the EU.
He told BBC Radio 5 Live’s Pienaar’s Politics: “No, I don’t see that he would. He has made his intentions pretty clear, he wants to secure arrangements he can recommend to the British people.”
Lord Heseltine rejected the idea that Cabinet ministers should be free to campaign on opposing sides during the referendum contest.
“I think to govern is to govern,” he said. “This is a matter for the Prime Minister and his colleagues. I think that it should not be a question of a free vote.”
Ashley Fox, leader of the Conservative MEPs in the European Parliament, warned Tories against attacking each other during the referendum.
He said: “As we go into this referendum let us remember there will be good Conservatives on both sides of the argument.
“During the campaign we must recall Ronald Reagan’s 11th commandment: Thou shalt not speak ill of fellow Republicans.
“We can debate ideas but as good Conservatives we must not attack each other. We must conduct this debate with courtesy and respect.
“Our shared values and love of country transcend any differences of opinion. For as soon as we move beyond the referendum, those values and our national interests will face their greatest threat in a generation – the Labour Party led, and I use that term generously, led by Jeremy Corbyn.”
Mr Hammond said the deal Mr Cameron gets will have to stand up to “the toughest scrutiny of all” or Britain will vote to leave the EU in the planned in/out referendum to be held before the end of 2017.