Bookmakers have shortened the odds on a second referendum taking place, with one leading betting firm finding a people’s vote is now the most likely Brexit scenario.

A Final Say vote before the end of 2020 is a “probability rather a possibility,” according to William Hill. It is the first bookie to give a second referendum a greater than 50 per cent chance of happening.

The company is offering odds of 8/11 on another EU vote, assessing that there is a 54 per cent chance of it being held in the next two years.

The bookmaker also lengthened odds that Prime Minister Theresa May’s Brexit deal will be approved by Parliament before 31 March to 5/2.

“The deal looks dead in the water and we believe that Theresa only has a couple of options open to her,” said William Hill spokesman Rupert Adams. “The first would be to revoke Article 50, the second is to have another referendum and we believe the second will be the more palatable option.”

It follows reports that some of Ms May’s closest advisors are now actively preparing for a second referendum as a viable way to break the Brexit deadlock.

Cabinet Office Minister David Lidington, Ms May’s de facto deputy, has met Labour MPs to discuss a cross-party consensus on the idea of another vote, according to The Sunday Times.

The newspaper also claimed that Ms May’s chief of staff Gavin Barwell was supportive of the idea.

Mr Lidington’s Cabinet Office officials have reportedly discussed the possibility of offering voters a choice between the prime minister’s deal and a no-deal Brexit. They are thought to expect MPs in the House of Commons to include the option of remaining in the EU to the ballot.

Mr Barwell denied that he favoured a people’s vote in a tweet on Sunday morning.

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With cabinet members in dispute over how to move forward with Brexit, Foreign Secretary Jeremy Hunt insisted the UK would “flourish and prosper” even in the event of a no-deal exit from the EU.

He told The Sunday Telegraph: “I’ve always thought that even in a no-deal situation this is a great country, we’ll find a way to flourish and prosper. We’ve faced much bigger challenges in our history.”

Mr Hunt also said he wanted a “crack” at succeeding Ms May as prime minister.

Jo Johnson, a Conservative MP who backs a people’s vote, said many MPs were now talking about how to prepare for a second referendum.

“In reality, no-deal is not going to be acceptable to Parliament … in that situation we’re going to need a plan B,” he told Sky News. “There are conversations about what’s going to happen next.”

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Mr Johnson said that if Ms May’s fails in Parliament it would “clarify thinking” among cabinet members about the need for a people’s vote.

Education minister Damian Hinds denied the government was planning for a second referendum. Mr Hinds said: “No, a second referendum would be divisive. We’ve had the people’s vote, we’ve had the referendum and now we’ve got to get on with implementing it.”

Labour MP Rebecca Long-Bailey, shadow business secretary, said on Sunday she remained opposed to a second EU referendum: “I think we need to respect the (original) referendum.”