Iain Duncan Smith says there is ‘no way on earth’ public wants Tories to deal with Labour

Theresa May’s appeal for cross-party unity to halt the deepening Brexit crisis appears to have been rejected after the former Conservative leader Iain Duncan Smith said there was “no way on earth” the public wanted the Tories teaming up with Jeremy Corbyn.

The Tory rebel, who had been gathering plotters in his office hours before the vote that could have ended May’s premiership, said the party needed the prime minister to threaten to walk away from the deal, not reach out to Labour.

“If you think you can reach out to the Labour party with the leadership they have got at the moment you must be living in a mad place, because there is no way on earth the public want to see us deal with the Labour party,” he told BBC Radio 4’s Today programme.

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May had emerged from Downing Street after the no-confidence vote on Wednesday night to urge MPs from all parties to cooperate to deliver Brexit in the national interest.

As the prime minister returned to Brussels in a bid for mercy, the Labour party said the EU would not budge unless she allowed the house to vote on her deal first. “What we’ve got to do now is start the negotiations in earnest. I think our EU partners will be a bit more flexible once they know the will of parliament,” the shadow chancellor, John McDonnell, told the BBC.

“The easiest thing for the opposition to do in these circumstances is to warm your hands as the Conservatives self-immolate, but you can’t do that, not when the issues are so big about the future of our country.

“There’s an overwhelming majority in the party against no deal, let’s establish that once and for all and use parliamentary mechanisms to narrow that option away, and secondly lets get a proper debate going.”

Tory hardliners failed to oust the prime minister on Wednesday night, but the vote did not appear to have taken the wind out of their sails. Jacob Rees-Mogg told reporters on Thursday morning that May should step down in the interests of the country as Margaret Thatcher had done the day after winning a similar ballot in 1990.

“If you look at the history of the leadership of the Tory party, you will notice that a number of leaders have won more votes before they left the party. Margaret Thatcher came out of French embassy and said: ‘We fight on, we fight to win,’ and the next day she resigned. It’s not impossible,” he said.

Duncan Smith said many Tory MPs had voted against May on Wednesday night because of the “frustration over the idea that Downing Street has failed to listen”.

He called on her to engage with her hard-Brexit critics and resolve their concerns over the backstop by threatening to withhold the UK’s £39bn divorce payment to the EU.

“We have to step up and say to the EU, ‘It’s not one-way this risk,’” he said. He urged the prime minister to tell the EU: “Your £39bn is fully at risk. We are not committed to the £39bn unless we get some resolution.

“We’ll carry on with World Trade Organisation terms. We need to say to them, enough is enough, you are simply not going to dragoon the UK into a deal … it could never have signed.”

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He told Sky News that May had a good chance of getting her party back on board if she went to the EU and played hardball and told them: “This is serious. If you want a deal you’d better damn well step up to the plate.”

The prime minister returns to Brussels on Thursday in the hope of winning new concessions, but the EU appeared to have hardened its position to reopening negotiations.

After a phone call to the European commission president, Jean-Claude Juncker, on Wednesday night, the Irish prime minister, Leo Varadkar, issued a statement saying they both agreed the withdrawal deal could “not be reopened or contradicted”.

The Brexit secretary, Stephen Barclay, said the “direction of travel” in Brussels was good, with draft guidelines for Thursday’s EU council summit indicating there might be a break for the UK.

According to a leaked document, it will issue a statement saying “the backstop does not represent a desirable outcome” and that it could “conclude expeditiously a subsequent agreement that would replace the backstop”.