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City chiefs today accused Theresa May’s Government of “playing chicken” with Britain’s financial stability as Tory civil war raged over Brexit.

They also pleaded with the Conservatives to stop fighting among themselves and instead focus fully on getting the best possible Brexit deal with the European Union.

In signs of growing disquiet in the Square Mile over the Government’s handling of Brexit, bosses in the financial sector raised their fears in the strongest terms yet. But they also accused Brussels of risking economic turmoil with its hardline stance on Brexit.

Meanwhile a major cash injection to stop the economy crashing in the event of a no-deal Brexit was set to be promised by the Chancellor today. “Be in no doubt that I will maintain enough fiscal firepower to support our economy if that happens,” Philip Hammond was expected to promise in his speech to the Conservative conference.

Catherine McGuinness, policy chairwoman at the City of London Corporation, said: “It is in neither side’s interests to play chicken with financial stability. Firms need clarity on Brexit in order to continue to drive investment and create jobs across the country.”

Brexit splits were dominating the Tory annual rally in Birmingham today after Boris Johnson launched an attack on Mrs May’s Chequers Brexit blueprint, and she rejected his proposed Canada-style free-trade deal.

Ms McGuinness added: “The Conservative Party should unite to ensure both sides take steps to avoid potentially damaging financial outcomes.

"Both the UK and EU urgently need to address cliff-edge issues such as contract continuity that could prevent the industry from servicing their clients. These risk destabilising markets as well as hitting consumers and businesses on both sides of the Channel.”

Her warnings were echoed by Huw Evans, director-general of the Association of British Insurers (ABI), who said: “We need a united government to fight for the best possible deal. The main negotiations have to be with the EU, not within the Conservative Party.”

Mr Evans said talk of no deal was “very alarming” and that it would be “highly detrimental to the UK’s world-leading financial services sector”.

Jasmine Whitbread, chief executive of London First, said: “Business is clear about what’s best for the country: a deal that preserves the benefits of the single market and keeps borders open for trade and goods. Crashing out is the worst possible scenario, and Canada-plus is not a credible option given our integrated supply chains.”

Ahead of a round-table discussion with financial services bosses at the Tory conference, City minister John Glen said: “I will be continuing to listen carefully to concerns of City representatives as we discuss the priorities and specific concerns of financial institutions in the Brexit negotiations.”

Nicky Morgan, Conservative chairwoman of the Commons Treasury Committee, said an outline of a trade deal was needed within weeks. “Businesses simply cannot wait much longer for certainty on a deal. The Canada option does not support them — it puts more barriers in their way for the sake of ideology. For businesses, ‘autumn’ cannot be an elastic term which ends in December.”