Everyone should worry about no deal, the civil servant who was, until March, head of the Brexit department has said.
Philip Rycroft, who resigned after 18 months, told the BBC’s Panorama no deal was “fraught with risk”.
And NI police said no deal could help recruitment for paramilitary groups.
Both the candidates in the race to replace Theresa May as prime minister – Jeremy Hunt and Boris Johnson – have said they would be prepared to leave the EU without a deal.
The UK had been due to leave the EU on 29 March but this date was delayed after MPs repeatedly rejected the prime minister’s withdrawal agreement. Currently, Brexit is set to take place on 31 October.
The government says it has been preparing for almost three years to minimise disruption in the event of no deal. It says it continues to provide people and businesses with information they need to prepare and encourage them to take action.
In his first broadcast interview since stepping down as permanent secretary at the Brexit department, Mr Rycroft said the planning operation for exiting the EU was “an unprecedented situation” and “the biggest exercise across government over the last few decades”.
He told Panorama: “This has been an extraordinary exercise to which the civil service is responding brilliantly well… The planning I think is in good shape, absolutely… but of course what that doesn’t mean is that there won’t be an impact from Brexit, and particularly a no-deal Brexit, because that is a very major change and it would be a very abrupt change to our major trading relationship.”
“The rational outcome over the next few months is to get a deal because that is overwhelmingly in the economic interest of both the EU and the UK.”
Mr Rycroft – who was in charge of preparing the UK for a no-deal Brexit until March this year – said: “It’s not in the UK’s interest to have no deal, it’s not in the EU’s interest to have a no deal.
“The rational outcome over the next few months is to get a deal because that is overwhelmingly in the economic interest of both the EU and the UK.
“I think everybody should be worried about what happens in a no-deal situation. We would be taking a step into the unknown.”
In the event of a no-deal Brexit, additional checks on goods being delivered across the UK-EU border could result in delays on the roads – especially around the Port of Dover in Kent, which handles 17% of the UK’s goods trade.
Richard Burnett, chief executive of the Road Haulage Association, said working with the government to prepare for no deal has been “a frustrating process”. He said: “We have no clarity of the processes – what’s actually going to happen on day one.”
Mr Burnett told Panorama that Transport Secretary Chris Grayling had left him a voicemail expressing his disappointment after the RHA issued a press release following a private briefing.
The Department for Transport said the Road Haulage Association had been heavily involved in EU preparatory work and would continue to be involved at every stage of planning.
In a statement, it added: “It is extremely unfortunate when details of private conversations held in confidence are made public in a press release.”
The Police Service of Northern Ireland also told the BBC of its concern at the impact on security of a no-deal Brexit.
PSNI Assistant Chief Constable Tim Mairs told Panorama that Brexit could provide a recruitment “opportunity” for the New IRA and other dissident paramilitary groups.
He said: “We know that the New IRA and other groups continue to recruit people and we believe that Brexit provides an opportunity for them to encourage people to recruit.”
But he added that, despite their worries, to date the PSNI had not seen “any upsurge” in violence or recruitment being driven by Brexit.
There are fears that a no-deal Brexit could lead to the introduction of a hard border between Northern Ireland and the Republic of Ireland.
Sinn Fein has said a hard border would lead to further calls for a referendum on Irish unification.
Mr Mairs also expressed fears price differences on the border could create “new opportunities” for criminal gangs, claiming “we would see, traditionally, connections between some of those groups and more violent groups.”
“The potential impact of a no deal on the economy in Northern Ireland is significant, and that would, in our view, present potentially significant security concerns.”
Will a no-deal Brexit happen?
The handling of Brexit has been a key issue in the Conservative leadership race.
Frontrunner Mr Johnson has said the UK should prepare “confidently and seriously” for a no-deal Brexit, but believes the chances of it happening are “one million to one against”.
He has said he will try to get a new deal negotiated with the EU, but has promised to leave the EU with or without a deal on 31 October.
His rival, Mr Hunt, also wants to change the withdrawal agreement negotiated by Mrs May and thinks this can be achieved by the end of October.
He has said he is prepared to delay Brexit beyond that date, if there is a prospect of getting a deal. If not, he would be prepared to leave without a deal but with “a heavy heart”.
Meanwhile MPs opposed to no deal are seeking ways to block such an outcome. Tory MP and ex-minister Sam Gyimah says there are “30 plus” Conservative MPs who would vote to block a no-deal Brexit.
- Panorama’s No-Deal Brexit: Are We Ready? will be broadcast at 20:30 BST on BBC One.