A secret Brexit plan has been drawn up by Cabinet ministers amid concerns that Theresa May's Chequers compromise will be killed off by Brussels.

The "fallback" option is based on existing "best-in-class" trade deals between the EU and other nations such as Canada, Japan, South Korea and New Zealand.

Cabinet sources confirmed that work on the plan is ongoing and that in the event that Mrs May's Chequers compromise is rejected or collapses in the face of Eurosceptic opposition it will be presented to Brussels.

The plan, which was originally commissioned by David Davis, the former Brexit secretary, is heavily based on the EU's trade treaty with Canada and far closer to the deal that Eurosceptics want.

It comes after Michel Barnier, the EU's chief Brexit negotiator, effectively killed off a key element of Mrs May's Brexit plan on Thursday by warning that Brussels "cannot and will not" allow the UK to collect duties on its behalf.

Liam Fox, the International Trade Secretary, accused the European Union of pushing Britain towards a "no deal" Brexit. "If [the EU] keep saying no to everything they will end up with no deal," he told Business Insider.