Labour's divisions over Brexit have erupted again as MPs joined calls for free movement to be kept after we leave the EU.

Former frontbenchers Clive Lewis and David Lammy are among those backing demands for an open immigration system.

The push, being orchestrated by the newly-formed Labour Campaign for Free Movement, flies in the face of official party policy.

Jeremy Corbyn has insisted that free movement will end when we formally leave the EU - although he has repeatedly refused to say whether he thinks immigration numbers should come down.

Former frontbenchers Clive Lewis (left) and David Lammy are among those backing demands for an open immigration system

Union chiefs include Manuel Cortes, of the Transport Salaried Staffs' Association have signed up to the campaign despite being normally considered allies of Mr Corbyn

But a large section of Labour support is in favour of maintaining the arrangements currently in place with the EU.

Union chiefs include Manuel Cortes, of the Transport Salaried Staffs' Association have signed up to the campaign despite being normally considered allies of Mr Corbyn.

A statement released by the group said:'We fought the last general election arguing against such scapegoating, and celebrating the contributions of migrants to our society. That tone must now translate into policy.

'Migrants are not to blame for falling wages, insecurity, bad housing and overstretched public services.

'These are the product of decades of underinvestment, deregulation, privatisation, and the harshest anti-union laws in Europe.

'On the contrary, migrant workers have been on the front line of fighting for better pay and working conditions. Labour is the party of all working people – regardless of where they were born.

'A system of free movement is the best way to protect and advance the interests of all workers, by giving everyone the right to work legally, join a union and stand up to their boss without fear of deportation or destitution.

'Curtailing those rights, or limiting migrants' access to public services and benefits, will make it easier for unscrupulous employers to hyper-exploit migrant labour, which in turn undermines the rights and conditions of all workers.'

Meanwhile, company bosses have urged the Cabinet to end public arguing over the potential terms of a Brexit transition phase and come to a collective agreement as soon as possible.

The Institute of Directors (IoD) set out a range of options including membership of the European Economic Area (EEA) and extending the Article 50 negotiating timetable, which will currently see Britain quit the European Union by the end of March 2019.

Jeremy Corbyn has insisted that free movement will end when we formally leave the EU - although he has repeatedly refused to say whether he thinks immigration numbers should come down

It comes amid increasing Tory tensions over the Brexit process, with Cabinet ministers publicly disagreeing over a potential transition agreement.

Last week, Chancellor Philip Hammond signalled that free movement of EU citizens would continue for a three-year transition period in all but name, with an added element of migrants having to register in the UK.

But International Trade Secretary Liam Fox insisted unregulated free movement of labour after Brexit would “not keep faith” with the EU referendum result and that the Cabinet had not agreed a stance on immigration.

The IoD said prioritising an agreement to extend Brexit talks under Article 50 would be “on paper the simplest solution”, giving more time to negotiate a trading relationship.

But the institute acknowledged that option would be “very politically challenging” for both the EU and some Brexit-backing MPs.