Ireland has threatened to block Britain's plans for a two-year transition period after Brexit amid a furious row over customs arrangements.

Phil Hogan, the Republic's EU commissioner, said that Ireland could be the "biggest victim of this mess" and accused the UK of "high-level delusion".

Leo Varadkar, the Irish Prime Minister, has called for Britain to stay in the Customs Union and warned that unless it does there could be a new border in the Irish Sea.

However Philip Hammond, the Chancellor, and Liam Fox, the International Trade Secretary, made clear in a joint article this weekend that Britain will leave the Customs Union and Single Market after Brexit in March 2019.

On Wednesday the Government will publish a position paper suggesting that ministers will stick to their plan for a "light touch" customs border between Ireland and Northern Ireland .