Rachel Reeves has joined the Labour push to reverse Brexit - with a youth 'free movement' deal being struck next month due to let in 80,000 every year.
The former Chancellor insisted Britain's 'future lies in the European Union' after Andy Burnham reignited the long-running row.
The PM's hints that the next manifesto could vow to rejoin the bloc have sparked deep divides in the party - up to Cabinet level.
Current Chancellor John Healey suggested he was sceptical about the idea in interviews last week, despite Mr Burnham urging ministers to maintain collective discipline on the issue.
In her first major intervention since being ousted from No11 in July, Ms Reeves said Brexit had made the UK 'poorer, weaker and less secure'.
Rachel Reeves insisted Britain's 'future lies in the European Union' after Andy Burnham reignited the long-running row
Writing in The Sunday Times, she welcomed Mr Burnham's 'leadership' in reopening the debate.
She said: 'I am proud of the progress we have already made in strengthening our relationship with the European Union.
'Brexit has made us poorer, weaker and less secure.
'There is a debate to be had about our future relationship with Europe, and I welcome Andy Burnham's leadership in facing up to this. No one in the Treasury ever doubted where my instincts were.'
Ms Reeves said: 'I do believe Britain's future lies in the European Union.
'However, it is incumbent on supporters of our re-entry to make the argument, demonstrate tangible benefits and to get the next steps right - especially ahead of the UK-EU summit later this month, where at a minimum we should be looking for confirmation of the ambitious youth mobility scheme negotiated earlier this year, and - I hope - progress towards entry into the SAFE defence partnership.'
Mr Burnham is due to meet EU commission chief Ursula von der Leyen in Brussels on November 20 to finalise new terms.
There are concerns he will make deep concessions in return for better trade arrangements.
Ministers reportedly agreed last week that 80,000 young Europeans will be allowed to come to the UK to live and work under a new 'youth mobility' deal. Critics have branded it youth 'free movement'.
The PM's call for an 'honest discussion' about a return to freedom of movement has prompted a frenzy in Labour circles.
Confusion mounted after he was pressed on how any change in Labour's manifesto red lines - ruling out rejoining the customs union and single market - would be put to voters.
Mr Burnham initially said there would be no shift within this Parliament and signalled that he could fight the next general election on a promise to take the UK back into the bloc.
But in another interview, he said 'no' when asked whether he would allow the UK to reinstate EU freedom of movement without a referendum.
That forced Downing Street to clarify that he was 'not leaning either way' on how to move forward or whether there needed to be a national vote.
Hints from Mr Burnham (pictured with Chancellor John Healey) that the next manifesto could vow to rejoin the bloc have sparked deep divides in Labour
In a letter to the Cabinet, Mr Burnham warned ministers against publicly advocating for any specific outcome after the EU-UK summit later this month.
'In the period beyond the summit, Government policy will be to explore options for the long-term relationship with the EU for consideration in the next Parliament,' he said.
'At the end of this process, we will set out to the country the respective merits and drawbacks of the various options.
'It is important that we remain aligned and disciplined as a Government in our messaging throughout this period.
'It will not be appropriate for ministers individually to advocate for specific options or opine on the likely outcome of the process.'
However, Mr Healey - who represents a heavily Leave-supporting area of South Yorkshire - used a series of post-Budget interviews last week to downplay the chances of the UK rejoining the EU.
The 66-year-old said he did not see Britain returning to the bloc in his lifetime and cast doubts on reinstating freedom of movement.
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