Richard Corbett's comments follow a meeting of top British government ministers on Wednesday that aimed to pave the way on the UK's strategy for leaving the EU.
A statement following the meeting appeared to indicate that the UK will not seek to remain a member of the European Economic Area (EEA), which requires participating states to accept free movement rules.
"Several cabinet members made it clear that we are leaving the EU but not leaving Europe, with a decisive view that the model we are seeking is one unique to the United Kingdom and not an off the shelf solution," said a spokesperson for Prime Minister Theresa May.
"This must mean controls on the numbers of people who come to Britain from Europe but also a positive outcome for those who wish to trade goods and services.
The spokesperson added that the Cabinet had agreed there was no need for a parliamentary vote on triggering article 50.
May had previously been urged by two former ministers to be wary of supporting a "hard Brexit" involving withdrawal from the EEA, with one Tory colleague warning that some British businesses "could not survive" without the free movement of people from other EU member states.
Reacting to the news, Corbett said, "Faced with the unpalatable choice between aiming for EEA style continued participation in the single market (at the price of accepting its rules, including free movement) or leaving it entirely (at the cost of facing tariffs and regulatory barriers to Britain's main export market), May seems to have chosen the latter."
Earlier, May told the gathering, "We must continue to be very clear that 'Brexit means Brexit', that we're going to make a success of it.
"That means there's no second referendum; no attempts to sort of stay in the EU by the back door; that we're actually going to deliver on this."
Such a "hard Brexit", warned Corbett, would have a significant economic cost to Britain.
"May intends to make this choice without a vote in parliament. And there will be no referendum on the outcome. The people will have been allowed a vote on the general concept of Brexit, when different (and false) versions of it were branded about, but not on the actual deal on offer once it is negotiated, when it becomes clear what it entails."
"Do Conservative MPs have the courage to dissuade her, or are they a bunch of wimps?"
British Liberal MEP Catherine Bearder said, "It is not enough to simply repeat that 'Brexit means Brexit'. The reality is that for communities across the UK, a hard Brexit would mean investment cut, opportunities lost and livelihoods destroyed."
"The Tory government must stop repeating platitudes and start to clarify exactly how it will protect the UK's economy, security and environment post-Brexit."
However Conservative MEP Ian Duncan said Wednesday's decision simply reflected the outcome of June's Brexit referendum, saying, "The Prime Minister has been clear that the will of the British people must and will be respected."
"As the party of government we have been given a clear mandate to deliver their instruction - to exit the European Union, and that is exactly what we will do."
Elsewhere, former British Prime Minister Tony Blair told French radio that it was "possible" that the British people would change their minds on Brexit once they realise the "severe consequences" of leaving.
Blair said it was still unclear what leaving would mean, despite May's insistence that "Brexit means Brexit".