Liam Fox's insistence that Britain can maintain free trade with the European Union post-Brexit is a "work of fantasy", Nick Clegg has said.
The former deputy prime minister warned that instead businesses would face a "deluge of bureaucracy and paperwork".
International Trade Secretary Dr Fox had said that trade with the EU can be "at least as free" as it is now, and that the UK would work with the World Trade Organisation on "taking an axe to red tape across borders".
The trade secretary's unguarded comments were made at a drinks reception for Tory activists.Read the full story ›
Dr Liam Fox, who was eliminated from the Tory leadership contest today after receiving just 16 votes from his Conservative MP colleagues, has said he does "not regret standing".
I am very grateful to those colleagues who supported me in the ballot today.
Naturally, I am disappointed not to progress further but I do not regret standing in this contest. I felt it was vital to stress the importance of national security in this debate and the need for a clear path to our exit from the European Union. I hope I have achieved both these objectives.
I have also sought to stress the need for experience as the successful candidate will have to take up the reins of government in less than 9 weeks.
Tory leadership candidate Liam Fox has pencilled in January 1, 2019 as a potential date for Britain officially leaving the European Union.
In an interview with the Sunday Telegraph, the Leave campaigner said the "referendum changed all the rules," calling it an "earthquake in our political system".
Dr Fox also said that if he becomes prime minister he would like to see an increase in defence spending and the size of the Navy.
We need to spend money on our national security because you need to buy insurance in a dangerous world," he told the paper.
"I would want to see an increase in defence spending as we saw an increase in our economy, for me that would be a priority.
"In particular I would like to see an increase in the size of the Navy and our cyber capability."
The former defence secretary also said he would also create a new department for trade and foreign affairs under his administration.
Former defence secretary Liam Fox urged the public to "trust themselves" and vote to "take back control" of the UK from the European Union which he described as a "collapsing building"
Speaking in his constituency of North Somerset, Dr Fox said it was "unworkable" to control immigration while Britain is in the EU, and instead advocated a points based system.
Following billionaire currency trader George Soros' warning that leaving the EU will trigger a plunge in the pound greater than Black Wednesday, and the warnings of economists and institutions such as the IMF that Britain should remain in the EU, Dr Fox countered that there are risks to staying in the EU and that people should "trust themselves" when casting their vote.
The Conservative MP also added that being outside the EU would allow the UK to work with growing markets, as well as gaining control of its law and borders.
Dr Fox was joined at Clevedon Pier by Culture Secretary John Whittingdale MP and Penny Mordaunt MP, both of who back leave.
Former Defence Secretary Liam Fox has revealed that he turned down the offer of a ministerial post in David Cameron's latest reshuffle of his top team.
Writing on his website, Dr Fox said: "I was honoured to be offered a post as Minister of State in the Foreign Office by the Prime Minister. I have turned it down."
He said he wanted to focus on the issues that affect his North Somerset constituents, which he listed as "the economy, immigration and Europe".
Dr Fox also added that he did not want to "be distracted from what needs to be said on these matters" by taking on a ministerial role.
Special protections for NHS funding must end after the next general election in 2015, a leading Conservative backbencher has said.
Former defence secretary Liam Fox said Britain was lagging behind the rest of Europe in key areas like cancer and stroke outcome rates, and claimed the idea that ploughing money into the NHS improves standards had been "tested to destruction".
"The increase over the last decade has been phenomenal and yet a lot of our health indicators lag behind other countries, particular things like stroke outcome or a lot of cancer outcomes," Dr Fox told The Times newspaper.
"We've become obsessed with throughput and not outcomes and that has been hugely to the detriment of the patients in our system."
Former defence secretary Liam Fox successfully claimed 3p of taxpayers' cash for a car journey of fewer than 100 metres, expenses documents show.
The Conservative MP made the claim after travelling 0.06 miles, or approximately 96.5 metres, within his North Somerset constituency from a concrete firm to a constituency surgery in Yatton in October 2012.
The Independent Parliamentary Standards Authority (Ipsa) notes the claim was paid last December.
Mr Fox also had another 15 claims of under £1 for car travel approved in 2012/13.