Tax hikes and spending cuts totalling £30 billion will need to be forced through in an emergency "Brexit Budget" if Britain votes to quit the EU, Chancellor George Osborne is warning.
Mr Osborne and Labour former chancellor Alistair Darling are insisting schools, hospitals and the armed forces would all see funding slashed after a win for the Leave side on June 23.
The basic rate of income tax would increase by 10%, climbing to 22p in the pound, the top rate would rise 3p to 43p, and inheritance tax would go up 5p to 45p in the pound, to plug a predicted £30 billion "black hole" in national finances triggered by Brexit, Mr Osborne is saying.
The NHS would see cuts of £2.5 billion, with the defence budget reduced by £1.2 billion, and education spending down by £1.15 billion, the Chancellor is warning as he gives "illustrative examples" of what would be in an emergency Budget.
As the Remain side tries to force the debate back on to the economy, Labour leader Jeremy Corbyn has strongly defended the free movement of workers within the EU, despite the party's deputy leader Tom Watson indicating migration rules could be changed.
The Chancellor is saying the emergency Budget figures are based on mid-range forecasts by the Institute for Fiscal Studies of the likely economic impact of Brexit, but pro-Leave Tories insist they would vote against such measures.
Spending on pensions could be cut by £2 billion, with the Home Office, transport, and local government taking a £5.8 billion hit, and alcohol and petrol duties surging by 5%, Mr Osborne is claiming.
"Quitting the EU would hit investment, hurt families and harm the British economy. As Chancellor, I would have a responsibility to try to restore stability to the public finances and that would mean an emergency Budget where we would have to increase taxes and cut spending.
"Far from freeing up money to spend on public services as the Leave campaign would like you to believe, quitting the EU would mean less money. Billions less. It's a lose-lose situation for British families and we shouldn't risk it."
Mr Darling, who ran the Treasury during the economic crash, is saying: "I am even more worried now than I was in 2008. We know we'll have not just a short period of uncertainty - but years and years of it. Far from having more to spend on public services - the giant con trick at the heart of the Leave campaign - we'd have tens of billions of pounds less."
Tory MP Steve Baker said he and other Conservatives would not support such a Budget.
"I am shocked that the Chancellor is threatening to break so many key manifesto pledges on which all Conservative MPs were elected. I could not support these plans to cut the NHS and increase taxes on hardworking families," he said.
Pro-Leave Labour MP John Mann said: "Alistair Darling is backing George Osborne's new austerity budget."
The economic warning came as Mr Corbyn said he would "absolutely" defend the EU's rules on free movement of workers.
"It's intrinsic to the European Union that there has to be free movement of people," he told Buzzfeed.com.
Shadow foreign secretary Hilary Benn refused to fully endorse the position of either Mr Corbyn or Mr Watson, telling BBC Newsnight: "It will be perfectly within our rights to say, for new member states ... we will determine how free movement applies to those countries."
The Leave side insisted emergency legislation would be brought in after a Brexit vote to ban European judges giving rulings on UK laws.
Commons Leader Chris Grayling set out a detailed post-withdrawal action plan as he indicated the UK may remain a member of the EU until the end of 2019 as it would not need to trigger formal exit procedures immediately.
He warned Britain may have to take early action to restrict free movement of labour to "prevent a massive influx of people" before the UK officially leaves.
Remain's once double-digit lead over Leave has been cut to one point, according to a ComRes survey for The Sun which puts In on 46% and Out on 45%.