Theresa May has brushed aside Treasury warnings that a no-deal Brexit will seriously damage the UK economy, claiming instead it “wouldn’t be the end of the world”.

The prime minister suggested forecasts highlighted by the chancellor, Philip Hammond, that up to 10 per cent would be wiped of GDP, were a “work in progress” and may even be rewritten.

Her tone is at odds with the letter written days ago by Mr Hammond emphasising that, regardless of any revision to forecasts, officials still expect a “damaging effect on the economy and public finances” in the event of no deal.

Ms May’s comments, made as she flew to South Africa on a trade trip, also risk reigniting the Tory row sparked by the letter, which went on to underline how a no-deal Brexit would require £80bn of extra borrowing.

Asked about the forecasts, Ms May said: “First off, as I understand, the chancellor was talking about a set of figures that, when they came out in January ... [I said] they were work in progress at that particular time.

“Look at what the director of the WTO has actually said. He said about a no-deal situation that it would not be a walk in the park, but it wouldn’t be the end of the world.”

Asked whether the Treasury figures might even be changed, Ms May said: “I said it was a work in progress in January.”

Dominic Raab: Government ready to deliver no-deal Brexit

While Mr Hammond’s letter accepted some “refinement” was taking place, the chancellor clearly stated: “However, we expect the analysis to show that for scenarios in which we have higher barriers to trade with the EU there will be a more damaging effect on the economy and public finances.”

The letter – suggesting that under a no-deal scenario GDP would be as much as 10 per cent lower after 15 years compared with if the UK had stayed in the EU – has enflamed the Tory row about the government’s approach to Brexit, with Eurosceptics accusing the chancellor of being needlessly gloomy.

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Tens of thousands of people demonstrated in London on Saturday calling for a second vote on Britain's departure from the European Union. / AFP PHOTO / Niklas HALLE'NNIKLAS HALLE'N/AFP/Getty Images NIKLAS HALLE'N AFP/Getty Images People's Vote march – demanding vote on final Brexit deal A young protestor shouts as she takes part in the People's Vote demonstration against Brexit Getty Images People's Vote march – demanding vote on final Brexit deal A woman holds a placard as she joins EU supporters, calling on the government to give Britons a vote on the final Brexit deal, participating in the 'People's Vote' march in central London, Britain June 23, 2018. REUTERS/Henry Nicholls HENRY NICHOLLS Reuters People's Vote march – demanding vote on final Brexit deal epa06833888 Pro-EU demonstrators take part in a People's March anti-Brexit rally in Parliament Square in London, Britain, 23 June 2018. Protesters are calling for a referendum on the final deal. The protest is taking place on the second anniversary of the Brexit referendum. EPA/ANDY RAIN ANDY RAIN EPA People's Vote march – demanding vote on final Brexit deal A protester's pro-EU t-shirt EPA People's Vote march – demanding vote on final Brexit deal epa06833892 A pro-EU demonstrator waves a European Flag during a People's March anti-Brexit rally in Parliament Square in London, Britain, 23 June 2018. Protesters are calling for a referendum on the final deal. The protest is taking place on the second anniversary of the Brexit referendum. EPA/ANDY RAIN ANDY RAIN EPA People's Vote march – demanding vote on final Brexit deal Demonstrators carry banners and flags as they participate in the People's March demanding a People's Vote on the final Brexit deal, in central London on June 23, 2018, the second anniversary of the 2016 referendum. 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Tens of thousands of people demonstrated in London on Saturday calling for a second vote on Britain's departure from the European Union. / AFP PHOTO / Niklas HALLE'NNIKLAS HALLE'N/AFP/Getty Images NIKLAS HALLE'N AFP/Getty People's Vote march – demanding vote on final Brexit deal epa06833964 A young pro-EU demonstrator takes part in a People's March anti-Brexit rally in Parliament Square in London, Britain, 23 June 2018. Protesters are calling for a referendum on the final deal. The protest is taking place on the second anniversary of the Brexit referendum. EPA/ANDY RAIN ANDY RAIN EPA People's Vote march – demanding vote on final Brexit deal Gina Miller and Caroline Lucas EPA People's Vote march – demanding vote on final Brexit deal epa06834044 Tens of thousands of people march through London during a People's March anti-Brexit demonstration, in London, Britain, 23 June 2018. Protesters are calling for a referendum on the final deal. The protest is taking place on the second anniversary of the Brexit referendum. EPA/ANDY RAIN ANDY RAIN EPA People's Vote march – demanding vote on final Brexit deal epa06833264 Thousands of people march through London during a People's March anti Brexit demonstration in London, Britain, 23 June 2018. Protesters are calling for a referendum on the final deal. The protest is taking place on the second anniversary of the Brexit referendum. EPA/ANDY RAIN ANDY RAIN EPA People's Vote march – demanding vote on final Brexit deal Tens of thousands of people march through London EPA People's Vote march – demanding vote on final Brexit deal epa06833265 Thousands of people march through London during a People's March anti Brexit demonstration in London, Britain, 23 June 2018. Protesters are calling for a referendum on the final deal. The protest is taking place on the second anniversary of the Brexit referendum. EPA/ANDY RAIN ANDY RAIN EPA People's Vote march – demanding vote on final Brexit deal Demonstrators at the People's Vote March Getty People's Vote march – demanding vote on final Brexit deal 'Two months too young to decide on my future' REUTERS People's Vote march – demanding vote on final Brexit deal Crowds taking part in the People's Vote march for a second EU referendum at Trafalgar Square in central London. PRESS ASSOCIATION Photo. Picture date: Saturday June 23, 2018. See PA story POLITICS Brexit. 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PRESS ASSOCIATION Photo. Picture date: Saturday June 23, 2018. See PA story POLITICS Brexit. Photo credit should read: John Stillwell/PA Wire John Stillwell PA People's Vote march – demanding vote on final Brexit deal Crowds gather on Pall Mall PA People's Vote march – demanding vote on final Brexit deal A man resembling Britain's Foreign Secretary Boris Johnson, joins EU supporters Reuters People's Vote march – demanding vote on final Brexit deal EU supporters, calling on the government to give Britons a vote on the final Brexit deal, participate in the 'People's Vote' march in central London, Britain June 23, 2018. 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Brexiteers were particularly enraged because the letter was released just as Brexit secretary Dominic Raab published a series of documents aimed at showing the UK was adequately prepared for a no-deal outcome.

On Monday a failure to reach an agreement looked increasingly likely after French president Emanuel Macron indicated Ms May’s proposals for a withdrawal agreement might undermine the integrity of the single market, a price he said was not worth paying.