Mr Hannan, Conservative MEP for the South East, made the dramatic claim during an interview with Express.co.uk.
Speaking of a second referendum he said: “I think there is a huge risk, it would be very clear what had happened.
“The country would have voted, more people would have voted for Brexit than have ever voted for anything, and their political elites would have overturned the result.
“That, quite apart from it being a bad outcome on Europe, would be catastrophic for the legitimacy and authority of our system.”
The self-styled ‘People’s Vote’ campaign, which is backed by some Labour, Liberal Democrat and Conservative MPs, is campaigning for a second referendum on whatever deal Theresa May negotiates.
The Labour Party has said it could back such a referendum if it can’t bring down the Government and force a general election.
Sir Keir Starmer, Labour’s shadow Brexit Secretary, went further telling his party’s conference last month “nobody is ruling out remain as an option” in a second vote.
However, Mr Hannan explained to Express.co.uk a second vote could destabilise the UK.
He argued: “Britain has until now been a country with a very high level of trust in politics.
“I know that may sound funny but what I mean is people don’t question the outcome of elections, we’ve never had a dictatorship and we’ve never had a revolution.
“People agree to the rules and stick to them in a way that is not true of every country.”
Mr Hannan admitted he worries a second referendum would finish these conventions.
He noted many of those “who were loudest in insisting that there would only be one vote, the Nick Clegg’s and the John Major’s”, are the same people who are now considering a second referendum.
He said: “If they now turn around and went back on that commitment I think it would be a crisis of democracy.”
Many of the key People’s Vote campaign supporters, who include Liberal Democrat leader Vince Cable, Labour MP David Lammy and Tory MP Anna Soubry, were prominent ‘Remain’ backers in 2016.
The same was true of celebrity backers like actor Tony Robinson and ex-footballer Gary Lineker.
Mr Hannan went on to discuss why, in his view, some politicians are unable to accept the referendum defeat.
He asserted: “I think it was the psychological shock of not getting their way on something.
“They are accustomed to politics having happened within certain parameters and in June 2016 those parameters were blown away.
“During the campaign Remainers decided the Leave case was reactionary, small-minded, anti-immigration and so on.
“By polling day I think they’d come to believe their own propaganda.”
Daniel Hannan has been a fervent Eurosceptic campaigner for decades making the case for Brexit via books, articles and public debates.
He was one of the founders of Vote Leave, the successful pro-Brexit campaign which won the June 2016 referendum.