The UK should "retain close economic relations" with the EU, the former Chancellor has urged.

George Osborne, dropped from Theresa May's Cabinet in July, said the UK can build stronger ties with countries such as Australia without losing out on trade with EU member states.

The Tory MP told the Commons business committee the UK should avoid being forced into a "binary" choice between remaining in the European single market and creating alternative trade deals with non-EU nations.

He said: "I agree with what my successor said at the Conservative conference. Philip Hammond said the country didn't vote to make itself poorer. That wasn't the intention of the majority who voted to leave the EU.

"So we want to make sure we continue to have the closest possible economic relationship with the place where over 40% of our exports go."

At the same committee, Conservative Lord Heseltine mocked May's appointment of three leaders of the Leave campaign to Cabinet positions.

Heseltine, who held Cabinet posts under Margaret Thatcher and John Major, offered apparently ironic praise of Boris Johnson, David Davis and Liam Fox.

He said: "We have three ministers now in charge - a brilliant set of appointments, in my view, because they can come up with the answers which have escaped me.

"The ability to trade seems to me to be an important part of our future. We have to find places to trade and if there are all these markets that have escaped the attention of British exporters it will be marvellous to have them pointed out to them by the ministers responsible."

The Westminster government has insisted the best outcome for the UK would allow British companies to trade with the European single market while the UK controlled its own immigration.

Osborne also responded to Nissan's warning that car manufacturing in Sunderland depended on the UK Government's negotiations with the EU.

He said: "This government and this parliament have got to make the UK the place to make cars in Europe - as it has been in recent years.

"We are a European base for car manufacturing. We produce more cars out of that plant in Sunderland than the whole of Italy.

"That's got to be something we focus on in the coming years, and overcome the challenges that present us."