The Tory party will be in “dire straits” should it adopt a no-deal Brexit that risks breaking up the UK and destroying businesses, former Cabinet Office secretary David Lidington has said.

In his most serious warning over the future of the party, Lidington, a key figure in bids to broker a Brexit deal in Theresa May’s cabinet, said the party would be risking its reputation of backing business and safeguarding the union.

“A no-deal exit would do massive harm,” he told the Observer. “I really do worry about the impact on the country and the impact on the Conservative party. The party is in dire straits if it ceases to be a coalition of people in the centre and centre-right of British politics. That is absolutely being tested.

“A key part of the Conservative party’s appeal has been on the grounds of economic competence and an understanding of the need to support business. The great majority of businesses are fearful of what no deal would mean and believe it would certainly do significant harm to the economy and livelihoods.

“The Tory party’s reputation as the champion of business will take a massive hit if we are left without a deal, but even worse would be the damage to the union of the United Kingdom.

“None of us can predict the future and whatever happens to the Europe debate I will be a committed unionist. But you only have to look at the opinion polls to see the prospect of no deal has increased support for a border poll and Irish unification, and in Scotland the prospect of a no deal produces greater support for Scottish independence. Any unionist should be alarmed by that evidence.”

It comes days after it emerged that some former Tories who lost the party whip for voting against no deal were considering forming a new political grouping at the next election. A no-deal Brexit is being advocated by Downing St should no agreement be reached with the EU by the end of the month. In reality, it is likely that the so-called Benn act will mean Britain’s membership of the EU will be extended if no deal is reached. However, many Tories privately say they would not be able to back a Conservative manifesto that advocated no deal.

Lidington said that he had been “utterly dismayed” by the heated and divisive language used in the Brexit debate and said it was now being “applied more generally”, with MPs suffering organised campaigns of abuse.

“There is a degree of aggression and vitriol in political debate that I have not seen before in the 45 years I’ve been involved in politics,” he said. “If you talk to MPs who have expressed an opinion on something, they find they receive 100 or 200 aggressive posts on Facebook or Twitter. Jewish MPs have been subjected to antisemitic material of the kind I have seen in the Holocaust museum at Yad Vashem, like Nazi propaganda in the 1930s. I’m not exaggerating. I’ve seen misogynistic and racist abuse.

“Politicians across all the leaderships of all parties and movements have a responsibility to exercise care and moderate language and tone. That means people accepting that their opponents are working from honourable motives.”

Lidington said he was encouraged by positive talks between Johnson and Leo Varadkar, the Irish prime minister, that hinted at a possible last-minute agreement. As a result, he called on Johnson to drop his insistence that the UK must leave the EU at the end of the month, with or without a deal. “I would be genuinely delighted if this leads to success,” he said. “If this leads to a deal, I think it would require a technical extension of some sort to take legislation through, for the European parliament to give its approval and so on. My view is the British public would be completely understanding of that. Much better to get the right outcome than have an artificial deadline.”

He would not rule out the idea of backing a confirmatory vote on a Brexit deal, but said he retained all his reservations about holding a second EU referendum. “I’ve made it a rule in my time in parliament to see what is put before parliament before deciding absolutely how I will vote,” he said. “I think the drawbacks to the second referendum remain the case. In particular, would it actually settle the issue? There are difficult questions over how you phrase the question or questions. It is my view that you would need no deal somewhere on the ballot paper, for democratic legitimacy.”