Bob Kerslake, a former head of the civil service, has urged the government to rule out a no-deal Brexit, saying ministers had the power to do so and thereby end the uncertainty that is gripping business and local government services.

He said councils and the police were being forced to divert their time towards making preparations for how to handle potential public disorder.

Speaking on BBC Radio 4, Lord Kerslake also called for a fresh referendum on Britain’s membership of the EU, which he admitted might take as long as a year to organise.

He denied this would in itself prolong the uncertainty, saying parliament had no alternative on the basis that MPs did not support leaving the EU without a deal and there was no majority in the House of Commons for any single form of Brexit.

“Where else do we go?” Kerslake asked. “A huge amount of quite unnecessary fear is being created among the public … The government can stop this now.”

In a foreword to a People’s Vote campaign paper, the Labour peer also claimed diplomats would take years to negotiate Britain’s future relationship with the European Union, and accused Theresa May of preparing for a “blindfold Brexit” in which the substantive issues about the UK’s future had not been confronted.

“On the central question of Brexit – how closely the UK will align with the EU on customs and rules – the political declaration merely says that there are ‘a spectrum of different outcomes’. That the country is being asked to embrace this uncertainty, or risk the disaster of a no-deal outcome, is extraordinary,” he wrote.

“We should not leave until and unless we know where we are going. If we do, the only certainty is that the resources, energy and talent of our country will be consumed by Brexit for many more years to come. The nightmare will not end. It will simply take on another form.

“I know and understand why there are many people who say we should just get it over with because they desperately want this endless debate to end. They want to get back to discussing the other big issues that matter to our country, such as health, housing and the environment. But a blindfold Brexit that offers no clarity can never provide closure.”

The People’s Vote paper said a vast array of issues such as frictionless trade, access to services to the single market, employment rights, human rights, migration, a future security relationship with the EU, as well as links between the UK and EU foreign policy, have yet to be negotiated in any substance, ensuring Europe will continue to dominate debate in British politics for years to come.

The People’s Vote campaign has taken a battering in recent weeks, partly because of the Labour leadership’s reluctance to make a second referendum part of its campaign position, emphasising instead the deals it is prepared to back to bring Brexit over the line.

The failure of MPs a fortnight ago to support a motion delaying Brexit for as long as nine months also showed the fissures inside the parliamentary Labour party, with as many as 20 MPs in working-class seats that voted leave determined to back Brexit. These MPs are sceptical that opinion has shifted away from leave, despite polling by the People’s Vote campaign suggesting otherwise.

People’s Vote still hopes its profile will rise again if attempts to build a consensus around one form of Brexit founder in late February or early March, leaving MPs facing the choice of leaving the EU with no deal, or backing a second referendum.