In an interview with the Today programme, Varoufakis, who resigned from the Syriza-led government last summer after he helped prime minister Alexis Tsipras take Greece to the edge of leaving the single currency, also outlined his latest thinking on what he sees as the doomed European project.
Echoing statements made to the Institute of Directors yesterday, Varoufakis said the UK was about to travel into uncharted waters, and would discover just how difficult and inflexible the European institutions can be.
You can check out any time you like, as the Hotel California song says, but you can't really leave.
The proof is Theresa May has not even dared to trigger Article 50. It's like Harrison Ford going into Indiana Jones' castle and the path behind him fragmenting. You can get in, but getting out is not at all clear.
- Yanis Varoufakis
Dr. Yanis' prescription
On what strategy the UK should adopt, Varoufakis, who was an academic before entering parliament for the first time in 2015 and diverting his considerable attention to anti-austerity campaigning, said: "My advice is simple: Activate Article 50, use those years as best you can and then strike a deal for the three or four years after Britain should be associated in a Norway-style agreement, and then use that period to have a robust debate on what's to come later.
"You need to create space and time during which to prepare yourself as a nation and a government.
"The discussion before Brexit was very low quality, verging between scare-mongering on the one side and xenophobia on the other. There was no debate about a post-Brexit Britian."
Through Greek eyes
Varoufakis also suggested the Eurozone was on the brink of a breaking up and, despite calls from academics, politicians, economists and people on both the left and right that the European project is unsustainable, he believes not enough people are aware of its failures.
The Eurozone is in a state of disintegration which cannot be seen by the naked eye. This is not a sustainable entity.
- Yanis Varoufakis
He added: "Given these centrifugal forces, Brexit inspires several forces within the Eurozone to go it alone. The trouble with the euro... given it was very very badly constructed, is that it was always going to lead to a rupture which would make the EU totally and utterly unsustainable.
"My great fear is that if the Eurozone goes, the EU goes. The repercussions are going to be dire."
Takes one to know one?
The outspoken Varoufakis, who has carefully cultivated his image as a maverick and free thinking politician, also issued a withering attack on George Osborne as a "particularly inept" custodian of the UK economy.
He said: "Osborne will go down in history as a particularly inept chancellor. He created fiscal targets that entrapped him. Every time he made a statement about the consolidations [the public finances], his target moved further away.
"Caught up in that trap of his own making, he would become even more aggressive in cutting government expenditure, particularly on the weaker members of British society, and so on and so forth in a vicious circle."
A meeting of minds
Blasting Tories and attacking austerity has won Varoufakis friends in high places in the Labour Party, he also admitted this morning, as Varoufakis declared he has had a hand in shaping shadow chancellor John McDonnell's economic policies.
I speak to John McDonnell, we discussed what Britain needs on a large number of occasions.
- Yanis Varoufakis
"We are in full agreement that there is one word that encapsulates what Britain is missing and which would make all the difference in many different realms of economic and social life. And that word is 'investment'".
Varoufakis, a proponent of much higher levels of government spending advised looking at the £900bn "sloshing around the financial sector in the City of London", and called on a new partnership between the government, the Bank of England a new public investment bank to "energise that money."