Speaking at the start of bilateral talks in Schloss Elmau, Mr Obama said the US-UK relationship remains strong, adding: "We have no closer partner around the world."

He said: "I would note that one of the great values of having the United Kingdom in the European Union is its leadership and strength on a whole host of global challenges.

"So we very much are looking forward to the United Kingdom staying part of the European Union because we think its influence is positive not just for Europe, but also for the world."

The comments are the strongest indication yet that Washington wants a Yes vote in the referendum which Mr Cameron has promised by the end of 2017 on whether Britain should stay in the EU.

Mr Cameron embarked on a tour of Europe soon after the election to seek support in his bid to renegotiate Britain's relationship with Brussels.

But he faces a tough opposition in the lead up to the referendum, with euroskeptic members of his party signalling they are ready to campaign for exiting Europe.

At least 50 Tory MPs, including former Cabinet ministers Owen Paterson and John Redwood, have signed up to the newly-formed Conservatives for Britain (CfB) to keep the pressure on ahead of the vote.

Mr Cameron earlier arrived at the G7 summit urging the world's most powerful leaders to keep up a united front in response to the conflict between Russia and Ukraine.

He added that Russia should continue to be subjected to sanctions.

"It (sanctions) has an impact on all countries.

"(But) Britain hasn't let our pre-eminence in financial services get in the way of taking a robust response to Russian-backed aggression and I don't think other countries should either."

The EU and US worked in concert to impose stiff sanctions on members of President Vladimir Putin's inner circle and key sectors of the Russian economy in the wake of last year's annexation of Crimea.

Russia was also ejected from the G8 group, resulting in this year's slimmed-down summit line-up of seven.

The conflict between Russia and Ukraine is just one of the subjects Mr Cameron says he hopes to discuss at the summit - which includes the leaders of Germany, France, Italy, Japan, Canada and the US.

He also urged the G7 to tackle corruption in the wake of the scandal engulfing FIFA.

He described corruption as "a cancer at the heart of so many challenges we face in our world", adding: "This is something we must not turn a blind eye to as perhaps was done for too long in the world of football."

Greece's debt crisis and how to tackle global warming will also be on the agenda, along with a proposed trade deal between the European Union and the United States.

Iraqi Prime Minister Haider al Abadi will also be on the sidelines of the summit to discuss his country's fight against Islamic State.

Mr Cameron is joined by German Chancellor Angela Merkel, Mr Obama, French President Francois Hollande, Italian PM Matteo Renzi, Canadian PM Stephen Harper and Japanese PM Shinzo Abe for the two-day summit.