The EU will come back to the negotiating table if parliament votes down Theresa May’s deal with Brussels, according to Romano Prodi, a former European commission president.

Prodi, who twice served as Italian prime minister and had Jean-Claude Juncker’s job until 2004, said that the EU needed to do everything it could to avoid the “economic catastrophe” of a no-deal Brexit.

On signing an agreement with the British prime minister last month, Juncker described the draft withdrawal treaty and accompanying political declaration on the future relationship as “the deal – the only deal possible”.

May has also said there is no scope for any further negotiation in Brussels if her deal is rejected when it comes to a vote in the Commons on Tuesday, and that the consequence of it being rejected would be “no deal or no Brexit”. The chancellor, Philip Hammond, described those who believed there could be a renegotiation as “delusional”.

But in an interview with the Observer, Prodi suggested it would still be possible to find a negotiated settlement in the increasingly likely event May suffers a heavy defeat in the Commons.

Asked how he expected the commission to respond after the vote, Prodi said: “Negotiate. We must keep free trade between us because it is in the British interests and European interest. The UK has no alternative – the EU is a large part of its trade. Always the problem of Northern Ireland, but it is possible. Common sense helps.”

On the EU’s insistence there could be no more negotiations, Prodi added: “Look, when the British parliament has still to vote you are obliged to be in this position. But then of course the day after you start dealing. This is politics.”

The options available to the EU’s 27 heads of state and government will nevertheless be curtailed when they meet on Thursday at the start of a two-day summit in Brussels, just two days after the meaningful vote in parliament.

There is a reluctance to open up the political declaration on the future relationship, given the difficulties the EU had in finding agreement on the terms set out in the 26-page document.

The November Brexit summit was just hours from being cancelled after Spain insisted on assurances about the fate of Gibraltar at the last minute. Further talks on that document could see it unravel as the EU’s member states seek to pursue their own interests.

There is also almost a consensus in Brussels that the withdrawal agreement, containing the most contentious part of the deal, the so-called backstop for avoiding a hard border on the island of Ireland through keeping the UK in a customs union indefinitely, cannot be touched.

Elmar Brok, a senior German MEP and ally of the chancellor Angela Merkel, insisted that “there will be nothing” offered to May if she comes back after a defeat in parliament.

“The heads of state and government have said that this is the deal repeatedly and I have no reason to disbelieve them,” Brok added.

But Philippe Lamberts, a member of the European parliament’s Brexit steering group, who is also leader of the Green group, said the reality might be more nuanced.

“The only thing that could be significantly changed is the political declaration but that is not legally binding on the EU,” he said. “If the UK comes back and they want Norway-plus, then why not?”

Lamberts suggested that the British government could also return to the backstop proposal made in October by the EU, rejected by May for being a “dislocation” of the UK.

Under that plan, a UK-wide customs union would be avoided by simply keeping Northern Ireland in the customs union and the single market as the rest of the country withdrew. “If she has already lost the DUP votes, then maybe she can do that,” he said.

Guy Verhofstadt, the former prime minister of Belgium, who is the European parliament’s Brexit coordinator, said: “Whatever happens next week, I’m reassured that, based on the votes this week, there is no majority in the UK parliament for a disastrous no deal.”

Other possible ways forward include separate EU statements reiterating that the bloc does not want to trigger the backstop, and its intention for it only ever to be a temporary measure.

Prodi said he was surprised both by parliament’s rejection of May’s deal given the dangers of a cliff-edge Brexit, and by the clamour among some for a second Brexit referendum which he described as “dangerous”.

“You don’t know what will be the result,” he said. “The problem of Brexit is not a problem of the economy but a problem of identity and that problem of identity is still on the table. And because it is a problem of identity it is also difficult to have a solution where you have a free flow of migrants.”

“[A second referendum] will be nasty,” Prodi added. “It will be on migration because the British economy [since the referendum] suffered but not so much, not a tragedy. But a little less growth doesn’t change anything in debates about identity.”