Continued payments into the EU budget might have to be one of the requirements of Brexit, Nick Clegg has suggested.
The former deputy prime minister urged Theresa May and Philip Hammond to "pluck up the courage" and "face down" Brexiteer "head bangers" on the Tory backbenches who advocate a clean divorce from Brussels.
Meanwhile, he insisted that if the Government does agree a so-called "hard Brexit" - widely interpreted as the UK leaving the European single market - there should be a second referendum.
Speaking to ITV's Peston On Sunday programme, he said: "There is a way forward for the Government.
"I think the only way forward is for Theresa May and Philip Hammond to pluck up the courage to face down Liam Fox, to face down the Daily Mail, to face down all these sort of head bangers on the backbenches and to say listen ..."
Mr Clegg was then interrupted and asked if he thought it would mean raising the prospect of the UK continuing to pay into the EU budget.
"Yes, I think that might have to be one of the requirements," he said.
"By the way, if we want to do what the Government says which is to remain a full leading member simply of some of the security-related arrangements in the European Union, Europol for instance, the things which keep us safe from cross-border crime, you can't do that just on those narrow terms without paying some money into some kind of institutional EU budget.
"At some point people are going to have to come clean with the fact that there aren't simple either/or choices."
Mr Clegg suggested the country should have another opportunity to "make a judgement on the final package" agreed by the Government.
When asked if he thought there should be a second referendum if the deal secured represents a "hard Brexit", he said: "Well, I think there should be. George Osborne put it rather well - here's an odd consolation - Tony Blair, George Osborne and Nick Clegg all agree that the country voted for Brexit, not for hard Brexit.
"People don't vote for economic self-harm. Yes, they vote on issues like immigration, identity, they don't like fussy bureaucrats in Brussels. I get all of that."
Mr Clegg said to translate that into saying people want the UK to quit the single market "is a woeful misreading of people's intentions and rewriting of history".