Theresa May’s Brexit plans have been dealt a blow after the Democratic Unionist Party backed a rival plan drawn up by Tory rebels to allow the UK to leave the EU's single market and customs union without a hard border in Ireland.
The European Research Group published a paper calling for equivalence of UK and EU regulations and conformity assessment for all agricultural goods on the island of Ireland.
The plan - which is at odds with the Mrs May's Brexit proposal which was agreed by her Cabinet out at her Chequers country home - was immediately backed by the DUP, whose 10 MPs are keeping the Mrs May’s Government in power.
Nigel Dodds MP, the DUP’s deputy leader who met with Mrs May yesterday at 10 Downing Street, described the 18-page report as “a positive and timely development” that could deliver a “sensible Brexit”.
The document showed “there are sensible practical measures which can ensure there will be no hard border between Northern Ireland and the Irish Republic”.
The report’s publication was overshadowed by outspoken criticism of Mrs May and her leadership at a private meeting of the ERG on Tuesday.
One source said there were 50 Tory MPs in the room "just discussing the matter openly"and "war-gaming" how to get rid of the Prime Minister.
Two Government ministers - a Minister of State and a Parliamentary Under Secretary - have told members of the ERG that they will vote against Mrs May in a vote of no confidence.
One MP at the meeting said he expected the number of MPs voting against Mrs May would be in “three figures”.
MPs were “very fed up”, he said, adding “there is no doubt there is a great deal of desperation about the PM’s performance. She is not going to change tack and she has to go”.
The Daily Telegraphhas learned the ERG has compiled two lists of rebels: one with 35 names of MPs who have submitted no confidence letters to the 1922 chairman Sir Graham Brady, while a second list contains details of 17 MPs who might sign letters to oust her.
This has led to concerns that any no confidence vote could happen “by accident” if the number of letters breached the threshold of 48 letters that would trigger a ballot.
Senior ERG figures played down talk of a coup against Mrs May. Jacob Rees-Mogg, the ERG’s chairman, stressed the ERG was a research body not a vehicle to unseat Mrs May.
He told The Daily Telegraph: “It is the flotsam and jetsam of political life. Number 10 should not be worried about this.”
Steve Baker, who chaired the meeting when Mrs May’s leadership was discussed, added: “This is a moment of very considerable gravity in the political life of the United Kingdom.
Asked if Mrs May’s position was “in jeopardy”, Mr Baker said: “There is not any point denying there is considerable anxiety among Members of Parliament.
“But I am not involved in any kind of organisational campaign against the Prime Minister. I can’t prevent individual colleagues having their own views.”
David Davis, the former Brexit secretary who was unveiling the ERG paper, added that his message for the ERG was “shut up and focus on the policy”.
Number 10 gave the report a cool warning. A source said that while it considers reports from MPs, in this instance “we don’t think it is the right way forward”.
A spokesman added that she would fight any no confidence vote if one were triggered.
A friend of the Prime Minister said she had “a strong sense of duty about seeing Brexit through” and suggested that even if a confidence vote were close, she would battle on.