The campaign for a fresh Brexit referendum has received a major boost after Jeremy Corbyn dramatically swung Labour behind handing the decision back to the public.

The Labour leader ended months of prevarication and criticism by announcing he would back another public vote if – as expected – his own softer Brexit plan is defeated this week.

The move delighted referendum supporters, who hailed it potentially as a defining moment and said there was now no going back for Mr Corbyn.

Labour MPs suggested the decision had been prompted by his panic over further defections to the breakaway Independent Group, launched by eight pro-EU MPs who quit Labour last week.

“If that’s what it’s done, then they have done the country a service,” said Owen Smith, who was sacked from the shadow cabinet for backing another referendum.

Emily Thornberry, the shadow foreign secretary, immediately said the Labour leader would join her in campaigning for Remain – if the referendum is staged.

Labour’s policy shift comes six months after The Independent launched its Final Say campaign for new referendum, backed by more than 1.1 million people who have signed a petition.

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Mr Corbyn’s backing has long been seen as the crucial tipping point without which there could never be a Commons majority in favour of a second public vote.

However, huge obstacles remain to securing that majority, given that Labour opponents of a referendum are believed to outnumber Conservative supporters.

The question that would be asked is unclear. Labour confirmed Remain would be on the ballot paper – but said it would not countenance an option of a no-deal Brexit.

Furthermore, the fear of another referendum may yet persuade Tory opponents of the deal to finally back it when the second “meaningful vote” takes place, probably on 12 March.

Nevertheless, Peter Kyle,the Labour MP who has proposed backing Theresa May’s deal subject to a referendum, said: “There's no going back on this now for Jeremy or the party.”

Mr Smith said the referendum was a prize worth grabbing for the Commons approving the stalled agreement. “It is the right thing to do for the country and for Labour voters,” he said.

Clive Lewis, a shadow minister who warned support for Brexit would keep Mr Corbyn pout of power, said: “This decision is a hugely positive step for the Labour party and our movement as a whole."

And Vince Cable, the Liberal Democrat leader, said it could be a defining moment. "We have long argued it is the right and logical thing to give the public the final say,” he said.

The announcement came shortly before Mr Corbyn addressed the weekly meeting of Labour MPs, at which he was certain to face strong criticism about his confused stance on Brexit.

At first, it was unclear whether Mr Corbyn was pledging to back a referendum on the prime minister’s deal, or only in the unlikely event of Labour’s own Brexit proposals being adopted.

However, a briefing note for Labour MPs stated: “If our frontbench amendment does not win the support of the Commons this week, we will put forward or support an amendment in favour of a public vote.”

Such an amendment “could be attached to the prime minister’s deal – or a version of it – should it win a majority in the House of Commons”.

The sentence was a reference to the amendment put forward by Mr Kyle, and fellow backbencher Phil Wilson, for a confirmatory referendum.

However, a Labour source said the party would not support the amendment in its current form, because “we will not be voting for anything which supports May's damaging Brexit deal”.

It was unclear what changes the leadership would demand. Mr Kyle and Mr Wilson have argued that Labour MPs would not need to vote with the Conservatives, but merely abstain.

The announcement drew some fierce criticism in the parliamentary Labour party meeting, the pro-Brexit John Mann telling Mr Corbyn: “In the Midlands and north of England this decision today will stop you from being prime minister. The price will be paid.”

Earlier, speaking in Egypt, Theresa May suggested she could try to force her agreement through parliament before it had been formally approved by the other 27 member states.

Rejecting calls for a delay to Brexit, she said: "An extension to Article 50, a delay in this process, doesn't deliver a decision in parliament, it doesn't deliver a deal. All it does is precisely what the word 'delay' says.”