David Miliband has said Europe should have “separate bedrooms” from the US, but not seek a “divorce” from its traditional alliance, despite the Trump administration’s impact on the relationship.

The former Labour foreign secretary, who has served as the president of the International Rescue Committee since 2013, said at the Hay literary festival on Sunday: “You can see the argument that strategic autonomy for Europe means divorce from the United States. I really counsel the dangers of that.

“Separate bedrooms, maybe. Divorce, no,. Because there is huge potential for us to end up in a very, very difficult position if we go the divorce option.”

Asked what that means in practice, Miliband joked that Europe also needed “separate bank accounts”, and said it needed to develop “agency” when it came to the economy and the military. That’s “difficult when it comes to fighters that you’re buying, aircraft that you’re buying – you’re buying European or you’re buying American”, and also in the AI space, “where what it means to be digitally sovereign is very, very challenging”.

The climate issue “is a good example of where we can’t afford to be held back by the fact that America is going into reverse. There’s a massive economic interest as well as an environmental interest in Europe being at the absolute forefront,” Miliband said.

He added that generating wealth and distributing it fairly is “core” to addressing Europe’s “weaknesses” politically and militarily, drawing attention to the fact that US GDP per capita is nearly twice that of Europe’s in nominal terms.

Miliband spoke on a panel alongside the writer and lawyer Philippe Sands and the philosopher Susan Neiman, and chaired by Misha Glenny, the presenter of BBC Radio 4’s In Our Time.

The UK-US relationship is “one-way”, said Sands. “Let’s not have any self-delusion.” He said the UK was “far more dependent” on the US. “What we’ve learned in the last couple of years is that it’s time to think through what we need.” Britain’s “primary connection” is with Europe, he said, “and that is the way we have to go.”

However, Britain “will not be seen as a reliable partner” by France, Sands added. “There is a lot of work to be done with Macron, or whoever follows Macron.”

The UK “needs to find a way to reconnect economically, politically, diplomatically, militarily with the European Union,” he said. “There are lots of different ways to do that, and whoever is the British prime minister in the next year or two years needs to spend a lot of time working with France to find ways to ease that into happening.”

Brexit has demonstrated to other EU member states what “disengaging from 40 years of regulatory alignment actually means to your economy – it is catastrophic, one way or another,” said Glenny.

On Saturday, Miliband called for a “national consensus” over the UK’s position on rejoining the EU. His intervention followed the Guardian’s report on Friday that a Cabinet Office official had suggested creating a single market for goods with the EU, which was rejected by EU officials.

Asked at a Hay event on Saturday whether rapprochement would mean leave voters feeling betrayed and disillusioned, Miliband said he didn’t think “immiserating ourselves or making us less secure honours the Brexit vote. The opposite is actually the case”. The UK has now “had an object lesson in 10 years of what Brexit means”.

He also commented on global conflicts, saying that the “break in the international system” represented by the war in Iran was “bigger” than the one represented by the war in Iraq. “This conflict has broken relationships between America and Europe in a way that I haven’t seen,” he said.