May is under pressure from both eurosceptics and pro-Europeans in her party and the European Commission to deviate from her negotiating stance – known as the Chequers plan – as she tries to secure an agreement on how to separate from the EU.

The government is pursuing a strategy that would sign British businesses up to a common rule book, to keep trade flowing across borders. The alternative, May has said, is that Britain will leave without a deal on March 29 next year .

Many, including the International Monetary Fund, have argued that such a ‘no-deal’ outcome would badly damage the world’s fifth largest economy.

On Tuesday, the Brexit committee published a report highlighting that time was running out to secure a deal before an October/November deadline and that significant obstacles needed to be overcome to reach a deal.

“If the Chequers plan is not acceptable as a basis for that, then the Government will need to find a different approach urgently,” committee chairman Hilary Benn said.

Benn said two alternatives to the current strategy were a customs union and alignment on relevant EU rules, or membership of the European Economic Area coupled with a customs union. Neither approach is consistent with current government policy.

The committee, which scrutinises and advises on policy but has no legislative power, was split over the impact that a no-deal Brexit would have, but agreed by a narrow majority that it would be “chaotic and damaging”.