Michael Gove has accused Philip Hammond of being "short-sighted" over Brexit and helping to inflict a "damaging blow" to the Conservative Party's "environmental credentials".

In a letter to Cabinet colleagues, seen by the Telegraph, the Environment Secretary blames the Treasury for a defeat in the House of Lords last week which could force the Government to retain all EU environmental protections after Brexit.

It is understood that the Chancellor blocked plans to give a new post-Brexit environmental watchdog the power to fine the Government and local authorities if they fail to increase recycling and cut pollution.

Mr Hammond believes that the proposal risks saddling the country with more regulation which may undermine the country's competitiveness after Brexit.

However, Mr Gove - who has introduced a series of new green policies in recent months - believes that the new environmental protections are necessary to ensure a "green Brexit".