The Prime Minister (pictured in Downing Street today) met with her Brexit 'war cabinet' today after sixty Eurosceptic Tory MPs backed a 30-page report savaging the plan
The controversial EU 'customs partnership' plan looked dead in the water last night following a Eurosceptic backlash.
Ministers clashed over the proposals during a tense three-hour meeting of Theresa May's Brexit war cabinet yesterday.
New Home Secretary Sajid Javid and Defence Secretary Gavin Williamson both voiced 'grave concerns' about the proposal, which was described as 'cretinous' by Eurosceptics last week.iPhone transfer software
Whitehall sources said the plan, which critics claim would keep Britain in a customs union in all but name, would 'not go forward in its current form'.
But ministers also failed to reach agreement on the alternative plan, known as 'maximum facilitation', which envisages using technology to minimise customs checks, particularly on the Irish border.
The Prime Minister, who had hoped to present a preferred option to the full Cabinet on Tuesday, instead had to order ministers and officials to conduct urgent work on both options.
They face a race against time to find an acceptable solution ahead of a crunch EU summit next month, when Mrs May hopes to give Brussels firm proposals so that trade talks can begin.
At yesterday's meeting, Boris Johnson, Michael Gove, Liam Fox and David Davis launched a drive against the customs partnership, in which Britain would collect tariffs to hand over to the EU.
They warned the plan would damage Britain's ability to strike trade deals and leave the UK subject to EU rules.
But critically, they were backed in their opposition by Mr Williamson and Mr Javid.
Both had supported Remain and were seen as swing voters ahead of the meeting, but by joining forces with Brexiteers they effectively killed off the plan.
Downing Street has reportedly been warned in correspondence that accepting the customs partnership deal would bring about the 'collapse' of the Government. Pictured: Environment Secretary Michael Gove, who is said to be willing to form a united front against the plan
The four hope to 'peel off' Defence Secretary Gavin Williamson (pictured today) and new Home Secretary Sajid Javid, both former Remainers
No vote was held, but sources said the 11-strong committee was divided by six to five against the partnership. One source said: 'The customs partnership has been killed off. It doesn't have the support of the Brexit war cabinet and it is very hard to see how it could be resurrected.'
The outcome follows the departure of passionate Remainer Amber Rudd, who had been expected to back the customs partnership, and her replacement with Mr Javid on Monday.
Mr Javid switching sides effectively changed the balance of the committee. The decision was a blow to Chancellor Philip Hammond and Business Secretary Greg Clark, who argued in favour of the customs partnership.
One source said Mr Clark had been 'close to tears' as he warned ditching the plan would threaten jobs. Friends of Mr Hammond last night said he was 'frustrated' and did not see how the alternative plan could resolve the need for a hard Irish border.
David Davis and Boris Johnson (pictured left and right in Downing Street today) are hoping to join forces with Michael Gove Liam Fox to kill off the customs partnership proposal
The move follows a concerted push by Eurosceptics to strangle the customs partnership plan, which they had warned would wreck Brexit.
The 60-strong European Research Group submitted a 30-page paper to Downing Street demolishing the plan.
They warned the 'undeliverable' plan would end up being 'substantially the same as a full customs union with the EU'.
Jacob Rees-Mogg said there was 'no question of an ultimatum' from Tory MPs over the issue. But he said there was a widespread view that the plan was 'deeply unsatisfactory'.
Sir Bill Cash, chairman of the European Scrutiny Committee, said the Eurosceptics' paper seemed to have been pivotal, adding: 'It does sound as if this analysis had an impact and I hope the Prime Minister will now abandon the proposal altogether.'
Prime Minister Theresa May
Backed Remain, has since insisted she will push through Brexit, leaving the single market and customs union.
Cabinet Office Minister David Lidington
A strong Remainer during the referendum campaign, recently made clear he has not changed his mind about it being better if the country had chosen to stay in the bloc.
Chancellor Philip Hammond
Seen as one of the main advocates of 'soft' Brexit in the Cabinet. Has been accused of trying to keep the UK tied to key parts of the customs union for years after the transition ends.
Home Secretary Sajid Javid
Brought in to replace Amber Rudd after she resigned amid the Windrush scandal, Mr Javid was seen as a reluctant Remainer in the referendum.
Many thought the former high-flying banker would plump for the Leave campaign, but he eventually claimed to have been won over by the economic case. He is likely to focus be guided by evidence about trade calculations in discussions over how closely aligned the UK should be with the EU.
Foreign Secretary Boris Johnson
The Brexit champion in the Cabinet, has been agitating for a more robust approach and previously played down the problems of leaving with no deal.
He is said to be unhappy with plans for a tight customs arrangement with Brussels - warning that it could effectively mean being lashed to the EU indefinitely.
Environment Secretary Michael Gove
Has buried the hatchet with Mr Johnson after brutally ending his Tory leadership campaign in the wake of David Cameron's resignation.
Thought to be less concerned with short term concessions that Mr Johnson, but focused on ensuring the UK is free from Brussels rules in the longer term.
Brexit Secretary David Davis
A long-time Eurosceptic and veteran of the 1990s Maastricht battles, brought back by Mrs May in 2016 to oversee the day-to-day negotiations.
He has said the government will be seeking a 'Canada plus plus plus' deal from the EU.
International Trade Secretary Liam Fox
Another Brexiteer, his red lines are about