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It's not legally binding, but could be politically binding.  One theory doing the rounds some time ago was that the UK would not actually initiate the Article 50 procedure to start exit negotiations if the referendum was passed - particularly if by a small margin - but would seek to renegotiate the present terms of membership in some major way and the new proposals would then be put to a second referendum.

This worked in Ireland in the case of the Nice treaty but then Ireland is fundamentally pro-EU.  I don't think it would work in the case of the UK because:

  1. The EU has already given the UK a lot of opt-outs and rebates and is probably heartily sick of the "British Question" at this stage. Giving even more concessions might not just break the EU, but would set an awful precedent for any other country contemplating leaving or just trying to deal with an anti-EU minority.

  2. A lot of the opposition to the EU in the UK is pretty fundamental and wouldn't change because of some new concession.  The free movement of labour (immigration) is a pretty fundamental principle of the EU and it is about the only change that might cause a change of heart.

  3. A lot of people would be pissed off at having to vote on the same issue twice, and would just vote leave on principle.

There has only ever been two UK wide referendums in the UK and neither were required by law because of the British tradition of parliamentary Sovereignty. This one was promised by Cameron in an attempt to keep the two wings of the Conservative Party united under his leadership.  Instead, it looks like it could well be the end of him.

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by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Jun 14th, 2016 at 11:42:04 AM EST
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