David Cameron has said the government might not be able to protect spending on pensions, the NHS and defence in the long term if the UK leaves the EU.
The prime minister said Brexit could cause a "black hole" in the public finances and threaten the "triple lock" guaranteeing state pension increases.
He told Andrew Marr "our economy would be smaller" if the UK left the single market leading to "difficult choices".
Vote Leave said it was "a frantic attempt to rescue a failing campaign".
With less than a fortnight to go before the referendum on the UK's EU membership on 23 June, other developments.
The comments come after Mr Banks had told The Telegraph before the announcement that he would consider a legal challenge.
Asked if he would seek now judicial review, Mr Banks told The Telegraph: “Definitely. We are going to see lawyers now. We think they haven’t applied the criteria they should have.”
When asked if the move was just “sour grapes” for failing to get the nomination, he responded: “It is not right. We have over a million supporters, [Vote Leave] have nobody but a few Tory politicians. ... This is a political stitch-up.”
On the impact of the decision on the EU referendum campaign, Mr Banks said: “It becomes an internal squabble in the Conservative Party, doesn’t it? Do we really think Gove and Boris are going to go at it with the Conservative Party? They are one and the same, it is a stitch-up.
“The bottom line is we’re going to judicially review it and we will go at it 100 per cent. The net effect is that it will probably delay the referendum.
“The process has been despicable. They have been saying they stitched it up with the Electoral Commission. We got nearly a million supporters.
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