Tory MPs have been urged to accept a “compromise” customs plan proposed by No 10 or face having a “watered-down” Brexit forced on them by Parliament.
Ex-leader Lord Hague said if Brexiteers pushed Theresa May too hard, it would increase the chance of the Commons voting to stay in the customs union.
A No 10 source said the “best of both worlds” plan offered the opportunity for friction-free trade with the EU and the scope to strike deals elsewhere.
Ministers will discuss it on Friday.
The UK is due to leave the EU on 29 March 2019, and negotiations are taking place on what the future relationship between the UK and the EU will look like.
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Ministers have so far failed to agree what type of customs model to pursue. The decision is seen as being key to facilitating trade and to avoiding new border checks between Northern Ireland and the Republic of Ireland, which is a member of the EU.
Friday’s Cabinet meeting at Chequers will be followed by a White Paper setting out details of the UK’s future relations with the EU, aimed at paving the way for an agreement in the autumn.
No details have yet been revealed about how the new proposed customs system will work although a No 10 source has promised it will be a “significant step forward”.
Tory MPs who want a clean break with the EU have warned that anything less will be a betrayal of the 17 million people who voted to leave in the 2016 referendum.
But former foreign secretary Lord Hague, a life-long eurosceptic who campaigned to remain in 2016, has said they should be careful what they wish for.
When is a plan not a plan?
BBC political editor Laura Kuenssberg
The immediate problem with the “new plan” is whether or not it really exists.
Because while Number 10 says it does, ask other people in government and they are not quite so sure. Ministers who you might have thought would be aware of the detail like – oh, you might imagine – the Brexit secretary had not agreed the lines, before Number 10 made their intervention.
And it’s said that the reason he has not been involved in agreeing the “new plan” is because it does not actually exist yet.
The customs decision expected in some parts of government therefore is what has been anticipated for some time as “max fac plus” – a souped up version of the proposal that originally won the day in the Brexit subcommittee what feels like a lifetime ago – with, you assume, a long lead-in time while the technology is made to work.
Baffled? Quite possibly so. But it’s perhaps only safe to say that four days before ministers are expected to actually make some final decisions, all is not precisely as you might have expected.
In an article for the Daily Telegraph, he said they did not have the numbers in Parliament to force through a “hard Brexit” – leaving the UK without any deal over market access or long-term customs arrangements.
“If ardent Brexiteers push too hard, they will end up without their main objective,” he wrote.
“If there is no agreement this week on a plan for customs arrangements, the Commons will be much more likely to vote in the near future to stay in the customs union in its entirety.
“The choice is either to back a compromise plan now or to end up with a more watered-down version of Brexit that would be forced on ministers anyhow.”
The government is committed to leaving the current customs union but the two alternatives it proposed last year, a so-called customs partnership and maximum facilitation system, are believed to now be regarded as practically or politically undeliverable.
The third option now on the table is thought to involve “alignment” with the EU in regulations covering trade in goods but a looser relationship for services.
Jacob Rees-Mogg, who chairs the pro-Brexit European Research Group of MPs, has warned that a deal which restricted the UK’s ability to make trade agreements with other nations or control migration could not be accepted and may trigger a revolt against the prime minister.
His comments provoked a backlash from some fellow Tory MPs, one accusing him of “blackmailing” Mrs May.
But amid signs of growing divisions, Foreign Secretary Boris Johnson spoke up in defence of his “principled” colleague while Brexit minister Steve Baker said Mr Rees-Mogg was right to air his concerns.
Lord Hague said the “sensible middle” in his party would not forgive anything which destabilised Mrs May’s position at such a critical time in the negotiations or was seen as “naked” political manoeuvring.
“Everyone threatening Theresa May with chaos, revolt, resignations and a leadership election if she does not do as they wish needs to think carefully about what might be the consequences of their actions,” he said.
The prime minister will meet Dutch leader Mark Rutte on Tuesday although No 10 has insisted that no foreign leader will be given sight of the UK’s latest plans before they are discussed at Cabinet.
Speaking on Monday, she urged the EU to consider her blueprint “seriously”, saying she hoped it would address the “real differences” between the two sides on the issue of the Irish border.
Brexit: Don’t push PM too far, Tory MPs warned}