DAVID Cameron has been accused of "outrageous scaremongering" by a fellow Conservative after warning Oxford-built Minis could be hit by trade tariffs if Britain quit the European Union.

With less than a week to go before June 23's referendum, South East MEP Daniel Hannan said leaving the bloc would let the UK strike its own free-trade agreements with countries such as Australia, the United States, Canada, China and India and boost trade for carmakers.

It comes after Prime Minister and Witney MP Mr Cameron claimed Brexit could see Minis built at the Cowley plant taxed by 10 per cent when they are shipped to the continent.

This is the tariff the EU currently places on motor vehicles coming into the bloc from countries outside such as the US.

In an interview with the Oxford Mail, Mr Hannan said: "Things are getting a little bit silly.

"Are these tariffs on Minis going to come before or after World War Three?

"I challenge you to find one European country that trades with the EU and faces tariffs when selling to it. There isn't one.

"It is sheer, outrageous scaremongering to say that would happen and I don't think people will fall for it."

Mr Hannan visited Oxford on Wednesday to campaign with fellow Vote Leave supporters, who claim they command strong support in areas including Blackbird Leys, Barton and Cowley.

He said while Britain could expand its trading activities globally if it left the EU, staying in would present further risks.

He pointed to the European Investment Bank's decision in 2012 to provide €190m of funding for a Ford Transit factory in Turkey – widely blamed for the closure of the transit van factory in Southampton.

"It is decisions like that which people in the South East remember," the Tory MEP said.

"And as long as we are in the EU, we can't sign our own free trade agreements with countries outside of it."

He added EU membership had also hampered the number of clinical trials being ran in the UK, including in Oxford, and said the UK government could step in to ensure institutions such as Oxford University would continue to get the funding they currently get from the EU.

Accusations of scaremongering made by the Vote Leave campaign were rejected by Mr Cameron earlier this month, who said the warnings were part of his duty as Prime Minister.

He pointed to financial institutions like the Bank of England, which have warned of market turmoil and insisted the Mini plant in Cowley would be left at a "serious disadvantage" if voters backed Brexit.

"Clearly, there is a risk", he said."

"Oxfordshire has a very successful, very high-tech trading economy but we do need access to the single market for our goods and services."