Brexit would lead to deeper Tory budget cuts, John McDonnell warned today.
In a speech in central-London today, the shadow chancellor also said Labour must wrestle the EU referendum debate away from Conservative Party infighting.
"In plain English, if we have a Tory Brexit then we have the likelihood of more Tory cuts to come," he said.
"As we all know what that would mean under a Tory Treasury. More austerity cuts just to meet their inflexible and flawed fiscal targets."
McDonnell said if the UK voted to leave the EU on June 23 people would be left with "a Tory government pushing austerity, committed to cutting first and thinking later".
"With the economy pushed into recession by Brexit, as the Bank of England predicts, the immediate future could look grim.
"It’s is not worth considering a Tory Brexit when a Labour Remain vote offers a truly positive economic case."
McDonnell said the 'Remain' campaign must put forward a "vision of Europe based on hope and solidarity".
"I want to rescue the debate from the negativity and ‘Project Fear’ coming from all sides of the Tory party," he said.
"The referendum resulted from the splits in the Conservative Party and their fear of Ukip, and as a result the debate has degenerated and brought out the worst in Westminster politics.
"People want facts, but more importantly they want to see the progressive alternative - not just negative Tory infighting.
McDonnell added: "It's time to turn this debate around, drive out the politics of despair and offer a vision for Britain and Europe, one where we protect workers' rights, tackle tax avoidance, get to grips with climate change and protect our industries like steel."
The Brexit debate has so far largely been dominated by leading figures in the Conservative Party - notably the argument between David Cameron and Boris Johnson.
Jeremy Corbyn has been criticised previously by some Labour MPs for not appearing to be as committed to campaigning for the UK to vote to 'Remain' as they would like.
But last week, former home secretary Alan Johnson, who is leading the Labour Party's 'Remain' campaign, said "every piece of energy" the party had would now be put into fighting for Britain to stay in the EU.
"Every resource in the Labour Party will be put into this campaign to get a Remain vote." he said.