Labour will “pay a heavy price” for Jeremy Corbyn’s refusal to fight Brexit and demand a fresh referendum on the withdrawal deal, Tony Blair warns today.

The former Labour leader stepped up his criticism of his party’s stance on leaving the EU – condemning his successor’s “failure to lead” on the nation’s most important issue.

The party now found itself in the “worst of both worlds”, as both Remain and Leave supporters came to the view that Labour was not on their side, Mr Blair argued.

And he again urged Mr Corbyn to say “the British people should have the final decision”, because of Theresa May’s failure to negotiate good exit terms.

In a new article, Mr Blair wrote: “The Leavers think we're not really for Leave because we want to stay in the customs union and, as I say, for many Leavers that is an unacceptable compromise.

“The Remainers, however, have now cottoned on to the fact Labour is not really for remaining either, except in the very limited sense of the customs union, and so, unsurprisingly, they're losing faith in Labour as a route to avoid Brexit.

“The Labour party will pay a heavy price for the leadership’s closet Euro-scepticism. The tragedy is the price the country will pay for Labour’s failure to lead.”

The warning comes as a succession of polls show the Conservatives edging ahead of Labour, despite their deep Brexit divisions and a sluggish economy.

Brexit threatens life on the Irish border: in pictures Show all 15 1 /15 Brexit threatens life on the Irish border: in pictures Brexit threatens life on the Irish border: in pictures An abandoned shop is seen in Mullan, Co Monaghan. The building was home to four families who left during the Troubles. The town was largely abandoned after the hard border was put in place during the conflict. Mullan has seen some regeneration in recent years, but faces an uncertain future with Brexit on the horizon Reuters Brexit threatens life on the Irish border: in pictures A defaced ‘Welcome to Northern Ireland’ sign stands on the border in Middletown, Co Armagh Reuters Brexit threatens life on the Irish border: in pictures Mervyn Johnson owns a garage in the border town of Pettigo, which straddles the counties of Donegal and Fermanagh. ‘I’ve been here since 1956, it was a bit of a problem for a few years. My premises has been blown up about six or seven times, we just kept building and starting again,’ Johnson said laughing. ‘We just got used to it [the hard border] really but now that it’s gone, we wouldn't like it back again’ Reuters Brexit threatens life on the Irish border: in pictures Farmer Gordon Crockett’s Coshquin farm straddles both Derry/Londonderry in the North and Donegal in the Republic. ‘At the minute there is no real problem, you can cross the border as free as you want. We could cross it six or eight times a day,’ said Crockett. ‘If there was any sort of obstruction it would slow down our work every day’ Reuters Brexit threatens life on the Irish border: in pictures John Murphy flies the European flag outside his home near the border village of Forkhill, Co Armagh Reuters Brexit threatens life on the Irish border: in pictures Potter Brenda McGinn stands outside her Mullan, Co Monaghan, studio – the former Jas Boylan shoe factory which was the main employer in the area until it shut down due to the Troubles. ‘When I came back, this would have been somewhere you would have driven through and have been quite sad. It was a decrepit looking village,’ said McGinn, whose Busy Bee Ceramics is one of a handful of enterprises restoring life to the community. ‘Now this is a revitalised, old hidden village’ Reuters Brexit threatens life on the Irish border: in pictures Union Flag colours painted on kerbstones and bus-stops along the border village of Newbuildings, Co Derry/Londonderry Reuters Brexit threatens life on the Irish border: in pictures Grass reflected in Lattone Lough, which is split by the border between Cavan and Fermanagh, seen from near Ballinacor, Northern Ireland Reuters Brexit threatens life on the Irish border: in pictures Donegalman David McClintock sits in the Border Cafe in the village of Muff, which straddles Donegal and Derry/Londonderry Reuters Brexit threatens life on the Irish border: in pictures An old Irish phone box stands alongside a bus stop in the border town of Glaslough, Co Monaghan Reuters Brexit threatens life on the Irish border: in pictures Billboards are viewed from inside a disused customs hut in Carrickcarnon, Co Down, on the border with Co Louth in the Republic Reuters Brexit threatens life on the Irish border: in pictures Seamus McQuaid takes packages that locals on the Irish side of the border have delivered to his business, McQuaid Auto-Parts, to save money on postal fees, near the Co Fermanagh village of Newtownbutler. ‘I live in the south but the business is in the North,’ said McQaid. "I wholesale into the Republic of Ireland so if there’s duty, I’ll have to set up a company 200 yards up the road to sell to my customers. I’ll have to bring the same product in through Dublin instead of Belfast’ Reuters Brexit threatens life on the Irish border: in pictures A disused Great Northern Railway line and station that was for customs and excise on the border town of Glenfarne, Co Leitrim Reuters Brexit threatens life on the Irish border: in pictures Alice Mullen, from Monaghan in the Republic of Ireland, does her shopping at a former customs post on the border in Middletown, Co Armagh. ‘I’d be very worried if it was a hard border, I remember when people were divided. I would be very afraid of the threat to the peace process, it was a dreadful time to live through. Even to go to mass on a Sunday, you’d have to go through checkpoints. It is terribly stressful,’ said Mullen. ‘All those barricades and boundaries were pulled down. I see it as a huge big exercise of trust and I do believe everyone breathed a sigh of relief’ Reuters Brexit threatens life on the Irish border: in pictures A bus stop and red post box stand in the border town of Jonesborough, Co Armagh Reuters

Mr Blair said Labour should adopt the “straightforward and electorally winning position” of saying the government had failed to “negotiate a good deal”.

It should then give the public a fresh referendum, saying: “You began Brexit, you mandated the negotiation and you should decide how it ends.”

The article comes after Nick Clegg called for MPs to revoke the Article 50 exit notice, to delay Brexit by at least a year and “lift the sword of Damocles”.

“When faced with so many doubts, so many loose ends, so many unresolved questions, the first and simplest thing to do is give the country that most precious of commodities – more time,” the former deputy prime minister said.

Mr Clegg acknowledged Brexiteers would “scream blue murder” but argued the EU would agree to the request after “a little huffing and puffing”.

Mr Blair's comments accompanied a report by his think tank setting out that the losses from the government's plan to leave the customs union “significantly outweigh any gains”.

There was no alternative customs arrangement that could create a frictionless border or retain an open Irish border, the report by EU expert Dr Andy Tarrant found.

And any new trade deals - for instance with the US or China - would involve significant compromises and were highly unlikely to mitigate for lost trade as a result of leaving the EU.

Mr Blair said the key Brexit dilemma – whether to protect the economy by sticking to Brussels' rules, or break free at the risk of economic damage – remained unresolved.

“Brexit could mean either of these two very different outcomes,” he said.