Mr Ummuna denounced as “ridiculous” the successful effort to block delegates at Labour’s Brighton conference from voting on a motion to keep the UK permanently in the single market.
And a former Labour Brexit adviser said the party was pursuing a “delusional” strategy which could leave Britain with no free trade agreements with the EU or the rest of the world.
In a TV interview on Sunday, Mr Corbyn made clear that he would resist pressure to commit Labour to single market membership after Brexit, as a group of 30 senior party figures including Mr Umunna are demanding.
“We need to look very carefully at the terms of our trade relationship, because at the moment we are a part of the single market and that has within it restrictions on state aid and state spending and pressures on it, through the European Union, to privatise rail and other services,” Mr Corbyn told the BBC’s Andrew Marr.
But speaking at a fringe meeting hosted in Brighton by soft Brexit pressure group Open Britain, Mr Ummuna said supporters of continued membership of the single market and customs union must expose this argument as a myth.
It was absurd to suggest EU states were blocked from nationalising industries, he said, pointing to the state-owned rail system in France.
And he said Germany had pursued an industrial strategy of the type planned by Labour for decades without running foul of the European Commission.
“State aid doesn’t stop us having the active industrial strategy we envisage in our manifesto,” said the Streatham MP.
He added: “The sovereignty of nation states is more under threat than ever before, not from the European Commission but from multinational companies operating across borders.
“If we think we are going to be able to stand aside from this club of nations and protect ourselves alone from this threat to our sovereignty, I’m sorry, that’s a pipe dream.”
Open Britain’s deputy director Francis Grove-White, who until last month was working on Brexit at Labour HQ, described Mr Corbyn’s comments as “depressing”.
He said it was “mad” for shadow international trade secretary Barry Gardiner to suggest Britain could strike progressive trade deals outside the EU with countries like the US, China and the Gulf states.
“It doesn’t take a lot to think how Labour conference would respond to a trade agreement offered by Donald Trump, Xi Jinping or the Saudis,” he said.
“What Barry is advocating and, if Jeremy goes down that route, the party is advocating is leaving the customs union to pursue new trade agreements only to find the Labour Party doesn’t support any of them and we end up with nothing.”
Any attempt to ignore EU states aid rules, as Mr Corbyn suggested, would block a free trade agreement with remaining member states and leave the UK without a deal, he warned.
Mr Grove-White said it was “absolutely essential that we challenge the delusional thinking going on within our own party”.
He warned: “If we don’t do that then the clock is ticking and I think we are going to end up in a bad place.”