A major Tory donor has threatened to stop funding the party if Theresa May plans to remove the UK from the "critical" single market after Brexit.
Sir Andrew Cook, who has given more than £1.2m to the party, told BBC Radio 4 that ending single market access was "chronic and dangerous" to the economy.
The engineering firm chairman said at least one of his factories was almost "entirely dependent" on access to it.
Sir Andrew backed the Remain campaign in the EU referendum.
"There are barriers to entry without the single market, there are tariffs," said Sir Andrew, who chairs William Cook, his family's firm which makes components for the rail, energy and defence industries.
"One of my factories has 200 people employed making engineering parts that go to France, Germany and Italy," he told BBC Radio 4's Today programme.
'Sleepwalk to disaster'
"Were it not for the single market I would not be trading with these people," he said.
Sir Andrew said the lack of a domestic manufacturing industry made exports vital "to reduce the chronic and dangerous balance of payments deficit that this country suffers from".
Theresa May has insisted that she wants firms to have the "maximum freedom to trade with and operate in the single market".
But Sir Andrew, 67, whose firm was set up by his great-great-grandfather William in 1840 and is now one of the UK's biggest steel and engineering groups, said: "There is a desire by my competitors in mainland Europe to exclude me from the market."
He told The Times that the country could "sleepwalk to disaster" if it lost access to the EU's single market.
He told the newspaper on Saturday that the "economic arguments of staying in the single market are overwhelming" and it would be a "catastrophe" if the country left.
"It is very difficult to make a political donation to a party when, although I support it ideologically, I do not believe that my interests and my ideology are ad idem with the principal Brexiteers," he said.
Sir Andrew, whose firm employs 600 people, said businesses like his rely on EU workers to fill jobs he says Britons do not want.
"EU citizens, with skills, [are] coming here to fill jobs that British people are either unable to do or don't want to do," he told Today.
The prime minister is due to confirm in a speech later this month that the UK will have two fundamental "red lines" in its Brexit negotiations - control of its borders and freedom from the European Court of Justice.
Mrs May has pledged to trigger Article 50 of the Lisbon Treaty - getting leaving talks with the EU under way - by the end of March. Talks can take up to two years, unless an agreement is reached to prolong the process.
In November last year, the Conservatives reported more than £2.8m in donations in the three months after the EU referendum - the highest amount of the major parties.