The UK will only be able to reach a collective reconciliation after the disastrous divisions of the past two years if it holds a further referendum on any final Brexit deal, the German parliament’s foreign affairs committee chairman Norbert Röttgen has said.

Speaking to the Guardian, Röttgen, a prominent member of Angela Merkel’s CDU governing party, said both sides needed to make concessions to reach an agreement if a catastrophic no-deal was to be avoided.

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He said: “In my opinion and from the outside, the only way Britain is to reach a reconciliation and end these deep divisions through society is if it holds a referendum in which no one can say, after two years of deep discussion, they did not know the consequences of Brexit. Very few knew the full consequences of Brexit after the first referendum.”

He said he supported a three-choice referendum in which voters chose between the government deal, a no-deal Brexit and remaining in the European Union.

Röttgen also joined criticism of Jeremy Hunt, the foreign secretary, for using his party conference speech on Sunday to liken the European Union to a Russian prison.

“Everyone understands the requirements of a party conference, but this rhetoric was disproportionate, and outside the boundaries of reasonableness. It will be remembered after the party conference. It matters that the foreign secretary shows responsibility in his language.

“We thought the Boris Johnson-type rhetoric was gone and over, so it is sad to see it replicated again. He is one of the most senior figures in government and responsibility is required.”

In one of the first signs that Germany may be willing to take up at least part of Theresa May’s Chequers proposals, Röttgen said the EU should be prepared to give the UK access to the single market in relation to goods, but not services, in return for the UK accepting EU rules and the customs union for goods.

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He said the EU could in return offer unspecified concessions on free movement. Setting up an architecture allowing the frictionless movement of UK goods – in effect inside a customs union – would effectively solve the Northern Ireland border problem, he claimed.

He said: “The EU is wrong to claim there can be no division between goods and services to maintain the integrity of the internal market. It is a position on which the EU has to change to find compromise. Britain, in order to resolve the border question, has to accept a frictionless regime of free movement of goods but without having any say on how the rules apply to Britain.”

He said he recognised that parts of his proposals would be rejected by Eurosceptic Conservatives and many remainers, but there may be a constituency in the middle that sees his proposals as a way to break the deadlock.

There has been growing concern in UK government circles that Merkel, weakened at home, is deferring to a harder-line France in the talks, making it more difficult to persuade the German chancellor to assert her instinct for a pragmatic compromise.

It is thought the CDU has concerns that both sides are becoming locked into positions from which neither can escape, and this impasse may require the clock to be stopped on the talks this winter, in effect a decision to extend the article 50 timetable leading to the UK leaving the EU next March.

He said he saw no point in seeking to punish the UK to discourage others from leaving, claiming there was no evidence any other EU country wished to exit.

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He argued: “It is more rational to say, ‘Yes Brexit is disastrous, but the responsible answer is one of damage limitation, rather than punishment.’

“The apparent derailing in the talks in Salzburg was not planned, but an accident. European leaders thought Theresa May’s approach of either Chequers or no-deal was inappropriate. Her presentation at the EU dinner and in newspaper interviews led to outrage.

“On the other hand, the topic was too serious for EU leaders to become as offended as they did. The language of rebuttal was too much. It should have been appreciated Chequers was a serious effort and led to the resignation of two cabinet members.”