Scottish Finance Secretary Derek Mackay has seized on a leaked cabinet committee paper that claims Treasury coffers would take an annual hit of up to £66billion if the UK goes for a so-called hard Brexit.
The SNP minister described it as a “stark warning” to Theresa May to ignore calls for an exit from the single market.
According to the document, leaving it and switching to World Trade Organisation (WTO) rules would cause GDP to fall by up to 9.5%, compared with if the country remained in the EU.
It is based on forecasts from the controversial study into the predicted impact of quitting published by George Osborne in April during the referendum campaign.
In response, Mr Mackay said the prime minister could choose to side with Ukip and the “hard-line Brexiteers now running her party” or to listen to the “chorus of warnings from business organisations and from within her own civil service and commit to keeping the UK in the single market”.
He added: “But with every day that passes – and with every notch the pound slumps on the international markets – it becomes clearer and clearer that a hard Brexit is set to impose an appalling cost.”
Labour’s shadow Scottish secretary Dave Anderson said it was clear the public did not vote for “economic misery and hardship” on June 23.
“If the Tories are going to pursue this hard Brexit option, they must make the consequences of this clear,” he added.
“It is time that the government stops playing political games and begins to communicate exactly what this will mean for the people of Scotland.”
The document says: “The Treasury estimates that UK GDP would be between 5.4% and 9.5% of GDP lower after 15 years if we left the EU with no successor arrangement, with a central estimate of 7.5%.”
It adds: “The net impact on public sector receipts – assuming no contributions to the EU and current receipts from the EU are replicated in full – would be a loss of between £38billion and £66billion per year after 15 years, driven by the smaller size of the economy.”
A UK Government spokesman said: “We want the best outcome for Britain. That means pursuing a bespoke arrangement which gives British companies the maximum freedom to trade with and operate in the single market, and enables us to decide for ourselves how we control immigration.”