Labour will 'pay heavy price' for Jeremy Corbyn's refusal to fight Brexit, Tony Blair warns

Ex-leader pleads for fresh referendum - as he argues both Remain and Leave supporters now think Labour is not on their side

Labour will “pay a heavy price” for Jeremy Corbyn’s refusal to fight Brexit and demand a fresh referendum on the withdrawal deal, Tony Blair warns today.

The former Labour leader stepped up his criticism of his party’s stance on leaving the EU – condemning his successor’s “failure to lead” on the nation’s most important issue.

The party now found itself in the “worst of both worlds”, as both Remain and Leave supporters came to the view that Labour was not on their side, Mr Blair argued.

And he again urged Mr Corbyn to say “the British people should have the final decision”, because of Theresa May’s failure to negotiate good exit terms.

In a new article, Mr Blair wrote: “The Leavers think we're not really for Leave because we want to stay in the customs union and, as I say, for many Leavers that is an unacceptable compromise.

“The Remainers, however, have now cottoned on to the fact Labour is not really for remaining either, except in the very limited sense of the customs union, and so, unsurprisingly, they're losing faith in Labour as a route to avoid Brexit.

“The Labour party will pay a heavy price for the leadership’s closet Euro-scepticism. The tragedy is the price the country will pay for Labour’s failure to lead.”

The warning comes as a succession of polls show the Conservatives edging ahead of Labour, despite their deep Brexit divisions and a sluggish economy.

Mr Blair said Labour should adopt the “straightforward and electorally winning position” of saying the government had failed to “negotiate a good deal”.

It should then give the public a fresh referendum, saying: “You began Brexit, you mandated the negotiation and you should decide how it ends.”

The article comes after Nick Clegg called for MPs to revoke the Article 50 exit notice, to delay Brexit by at least a year and “lift the sword of Damocles”.

“When faced with so many doubts, so many loose ends, so many unresolved questions, the first and simplest thing to do is give the country that most precious of commodities – more time,” the former deputy prime minister said.

Mr Clegg acknowledged Brexiteers would “scream blue murder” but argued the EU would agree to the request after “a little huffing and puffing”.

Mr Blair's comments accompanied a report by his think tank setting out that the losses from the government's plan to leave the customs union “significantly outweigh any gains”.

There was no alternative customs arrangement that could create a frictionless border or retain an open Irish border, the report by EU expert Dr Andy Tarrant found.

And any new trade deals - for instance with the US or China - would involve significant compromises and were highly unlikely to mitigate for lost trade as a result of leaving the EU.

Mr Blair said the key Brexit dilemma – whether to protect the economy by sticking to Brussels' rules, or break free at the risk of economic damage – remained unresolved.

“Brexit could mean either of these two very different outcomes,” he said.

“How then can it be said that the British people in June 2016 decided for one option over the other?”