The Foreign Secretary has warned Britain will be punished by the European Union for leaving because other countries will not want to see it "succeed" alone.
Speaking to the BBC's Andrew Marr Show, Mr Hammond said: "I think we would be dealing with a Europe that looked very much less in our image. I think the thing we have to remember is that there is a real fear in Europe that if Britain leaves the contagion will spread."
He also said there are "still a lot of moving parts" in a renegotiation deal on Britain's membership of the EU, ahead of a crunch summit in Brussels this week.
Mr Hammond also insisted that prior to an in/out referendum, the final agreed package will have to be looked at “as a whole”.
“The point of having a referendum is that everybody will make up their own mind about whether the package, on balance taking the rough with the smooth, is in Britain’s interest or not”.
It comes as new polling data reveals the majority of the public believe David Cameron will be unable to get a good deal in his renegotiation.
Figures from the latest ComRes survey for the Independent on Sunday and Sunday Mirror newspapers, showed that 58 percent of people believed Mr Cameron will not get a good deal for Britain.
of people Mr Cameron will not get a good deal for Britain, according to a ComRes survey
Of those surveyed, 21 percent thought he would achieve a good deal.
The figures put pressure on the prime minister as he heads to Brussels in the coming week for meetings with EU leaders.
But Mr Cameron can draw some comfort after five previously Eurosceptic Labour figures - including ex-home secretary David Blunkett and former foreign secretary Jack Straw - threw their weight behind his deal in an open letter printed in the Sunday Mirror.
Hilary Benn, the shadow foreign secretary, former Labour leader Neil Kinnock and MP Margaret Beckett also backed Mr Cameron in the letter.
"The conclusion of the renegotiation will hopefully strengthen this relationship as we make the progressive case for Britain in Europe," they wrote.
All five campaigned against remaining in Europe in the 1975 referendum.
Separately, two top travel industry figures have warned that leaving the EU could put tourists safety at risk and push up airline prices.
Writing in The Sunday Times, EasyJet chief Carolyn McCall said: "The EU has brought huge benefits for UK travellers and businesses. Staying in the EU will ensure that they, and all of us, continue to receive them.
"How much you pay for your holiday really does depend on how much influence Britain has in Europe."
Peter Long, the former boss of the Tui travel group, insisted close co-operation with other EU states was essential to "protect the security of our holidaymakers".
Mr Cameron has repeatedly said he wants Britain to stay in a reformed EU.
He reiterated that in speech on Friday in the German city of Hamburg, alongside German Chancellor Angela Merkel.
Ms Merkel, for her part, said she was becoming more confident a deal could be struck, but warned more compromises may be needed on both sides.