Former Labour leader Neil Kinnock has urged Jeremy Corbyn to retain membership of the single market at least for any transitional period, amid a lack of unity within the party over its position on Brexit.

His comments came as it emerged Philip Hammond, the Chancellor, is seeking a transitional arrangement in the Brexit negotiations lasting up to three years – the same year scheduled for the next general election.

Lord Kinnock, who led the Labour party from 1983 until 1992, told The Observer: “The only way to mitigate the dreadful instability that will be costly for communities and industry is to try to ensure that, at least for a transitional period, we retain participation in the single market or the customs union, or both.”

Ex-Lord Chancellor Lord Falconer also backed staying in the single market, and TUC general secretary Frances O’Grady insisted the UK should not quit. Writing in The Mail On Sunday, she said: “If there’s another way of getting a frictionless trade deal that protects jobs and rights at work, trade unions would love to know.”

Labour’s London Mayor, Sadiq Khan, also used an interview over the weekend to suggest that Brexit could still be “trumped” if the party used the next general election manifesto to commit to holding a second referendum on withdrawal.

In response to the interventions, a spokesperson for Labour told The Independent: “Labour respects the result of the referendum and is making the case for a jobs-first Brexit, through securing full tariff-free access to the European single market.”

According to The Observer, some figures within the party are also seeking to force an emergency vote at Labour’s annual conference in the autumn, with the aim of committing the party to back membership of the single market.

Last week the Labour leader told the BBC’s Andrew Marr Show: “The single market is dependent on membership of the EU. What we have said all along is that we want a tariff-free trade access to the European market and a partnership with Europe in the future.

“The two things are inextricably linked so the question then is the kind of trade relationship of the future, and we have made it very clear we want a tariff-free trade access with the European market.”

In pictures: European parliament Brexit discussions Show all 12 1 /12 In pictures: European parliament Brexit discussions In pictures: European parliament Brexit discussions European commission member in charge of Brexit negotiations with Britain, French Michel Barnier listens at the President of the European Commission Jean-Claude Juncker speaking at the European Parliament in Strasbourg Getty Images In pictures: European parliament Brexit discussions Frank-Walter Steinmeier, President of the Federal Republic of Germany, delivers his speech at the European Parliament in Strasbourg EPA In pictures: European parliament Brexit discussions European Union's chief Brexit negotiator Guy Verhofstadt, President of the Group of the Alliance of Liberals and Democrats for Europe (ALDE), addresses the European Parliament during a debate on Brexit priorities and the upcomming talks on the UK's withdrawal from the EU Reuters In pictures: European parliament Brexit discussions Michel Barnier, European Chief Negotiator for Brexit reacts during a meeting at the European Parliament in Strasbourg EPA In pictures: European parliament Brexit discussions Member of the European Parliament and former leader of the anti-EU UK Independence Party (UKIP) Nigel Farage wears socks with Union Jack flag at the European Parliament in Strasbourg Getty Images In pictures: European parliament Brexit discussions Nigel Farage, United Kingdom Independence Party (UKIP) member and MEP, addresses the European Parliament during a debate on Brexit priorities and the upcoming talks on the UK's withdrawal from the EU Reuters In pictures: European parliament Brexit discussions European commission member in charge of Brexit negotiations with Britain, French Michel Barnier gestures during speeches at the European Parliament in Strasbourg Getty In pictures: European parliament Brexit discussions The President of the European Commission Jean-Claude Juncker (L) speaks with European commission member in charge of Brexit negotiations with Britain, French Michel Barnier at the European Parliament in Strasbourg Getty In pictures: European parliament Brexit discussions European Union's chief Brexit negotiator Guy Verhofstadt, President of the Group of the Alliance of Liberals and Democrats for Europe (ALDE), addresses the European Parliament during a debate on Brexit priorities and the upcomming talks on the UK's withdrawal from the EU Reuters In pictures: European parliament Brexit discussions Member of the European Parliament and former leader of the anti-EU UK Independence Party (UKIP) Nigel Farage gestures during speeches at the European Parliament in Strasbourg, eastern France, on April 5, 2017. The European Parliament will on April 5 lay down its "red lines" for negotiations over a Brexit deal, on which the assembly will have the final say in two years' time. / AFP PHOTO / Sebastien BozonSEBASTIEN BOZON/AFP/Getty Images Getty In pictures: European parliament Brexit discussions German president Frank-Walter Steinmeier delivers a speech during a plenary session at the European Parliament in Strasbourg Getty In pictures: European parliament Brexit discussions The European Parliament in Strasbourg, eastern France Getty Images

Barry Gardiner, the Shadow International Trade Secretary, said remaining within the customs union would be a “disaster”, adding: “As a transitional phase, a customs union agreement might be thought to have some merit. However, as an end point it is deeply unattractive.”

But days later, Shadow Chancellor John McDonnell and Shadow Brexit Secretary Keir Starmer appeared to soften the party’s stance on membership of the single market. Mr Starmer said that the party needed to be flexible in its approach and “not sweep options off the table” while Mr McDonnell added: “The structures – whether we are in or out – are a secondary matter.