The Treasury is “blind to the facts” on Brexit and has been “co-opted” by Brussels to make the UK’s withdrawal from the EU “difficult”, according to a leading Eurosceptic Tory MP.

Bernard Jenkin, a former director of the Vote Leave campaign, said the Treasury was “legitimising EU threats of economic disruption” as he said Theresa May should soon “assert the authority of her office” and walk away from talks.

Mr Jenkin’s intervention comes after the Prime Minister faced calls to sack Philip Hammond amid claims the Chancellor has been “making Brexit hard” and for being “miserable”.

Meanwhile, Mrs May has also been urged to demote Boris Johnson over his Brexit interventions but has been warned that the Foreign Secretary would “just say no” and reject such a request.

Mrs May indicated that Mr Johnson could be moved into another Cabinet role in a reshuffle at the end of the month after she said she would not "hide from a challenge".