Jeremy Corbyn has warned against a "hard Brexit" as cutting ties with the European Union without a trade deal would have a damaging impact on British manufacturing.
The Labour leader dismissed the vision of some in the Brexit camp that the UK could become an offshore tax haven by breaking away from Brussels.
He acknowledged concerns about continuing with the free movement of people after Brexit but insisted they could be addressed with a fund to support areas under pressure and action to tackle the undercutting of local wages.
Mr Corbyn told BBC One's Andrew Marr Show: "If you go for hard Brexit, which there are some elements in the Government want to, then there is a huge hit going to be taken on manufacturing industry in Britain because the European market which they rely on extensively - 70% of British exports go to Europe - they are going to be hit very, very badly."
He said the vision of Britain "as a sort of tax haven, offshore island" with "great levels of inequality and the loss of most manufacturing industries" was not "very appetising to most people in this country".
Immigration was one of the key issues that swung the June referendum in favour of Brexit.
Asked if he believed free movement had to end, Mr Corbyn said: "I think if we have a market arrangement with Europe then there is going to be a demand by Europe - it's absolutely clear, particularly by Germany - saying that has to include the rights of people to work in different parts of the European Union and Britain, which will then be outside the European Union but part of the market.
"There is also the question of British people working in Europe and two million British people who have made their homes in Europe as well.
"The other issue, which is the one that caused the most concern, is the undercutting of wages and conditions and the impact of migration on some communities.
"So, a Migrant Impact Fund to deal with that but also the question of the undercutting of wages, bringing people in on lower than local wages, destroying local conditions.
"For example, in Lincolnshire there is an average wage rate that is considerably lower than the rest of the country."
Mr Corbyn said Labour was working with socialist parties across Europe on the UK's future relationship with the continent.
"But he insisted Parliament should be kept involved in the Brexit process. In an attack on Theresa May's approach he said: "I don't think it's democratic and I don't think it's sustainable at all."