Theresa May is ready to throw her weight behind a Brexit compromise from Conservative MPs in order to quell a growing rebellion over the government’s attempt to enshrine the date of Britain’s EU departure in European law.

The prime minister will support an amendment that leaves the Brexit deadline in place but gives MPs the power to push it back if the EU27 agree, in order to avoid a second humiliating Commons defeat.

The move comes as members of the cabinet have held a series of informal meetings in twos and threes to prepare for critical discussions about what Brexit “end state” the government should be aiming for.

Quick guide What are Brexit options now? Four scenarios Show Hide Staying in the single market and customs union The UK could sign up to all the EU’s rules and regulations, staying in the single market – which provides free movement of goods, services and people – and the customs union, in which EU members agree tariffs on external states. Freedom of movement would continue and the UK would keep paying into the Brussels pot. We would continue to have unfettered access to EU trade, but the pledge to “take back control” of laws, borders and money would not have been fulfilled. This is an unlikely outcome and one that may be possible only by reversing the Brexit decision, after a second referendum or election. The Norway model Britain could follow Norway, which is in the single market, is subject to freedom of movement rules and pays a fee to Brussels – but is outside the customs union. That combination would tie Britain to EU regulations but allow it to sign trade deals of its own. A “Norway-minus” deal is more likely. That would see the UK leave the single market and customs union and end free movement of people. But Britain would align its rules and regulations with Brussels, hoping this would allow a greater degree of market access. The UK would still be subject to EU rules. The Canada deal A comprehensive trade deal like the one handed to Canada would help British traders, as it would lower or eliminate tariffs. But there would be little on offer for the UK services industry. It is a bad outcome for financial services. Such a deal would leave Britain free to diverge from EU rules and regulations but that in turn would lead to border checks and the rise of other “non-tariff barriers” to trade. It would leave Britain free to forge new trade deals with other nations. Many in Brussels see this as a likely outcome, based on Theresa May’s direction so far. No deal Britain leaves with no trade deal, meaning that all trade is governed by World Trade Organization rules. Tariffs would be high, queues at the border long and the Irish border issue severe. In the short term, British aircraft might be unable to fly to some European destinations. The UK would quickly need to establish bilateral agreements to deal with the consequences, but the country would be free to take whatever future direction it wishes. It may need to deregulate to attract international business – a very different future and a lot of disruption.

The talks, which will start with the prime minister’s Brexit “inner cabinet” on Monday and then a wider discussion on Tuesday, could see divisions start to open up between key Brexiters Boris Johnson and Michael Gove and colleagues.

Sources said Gove was unhappy about EU demands, accepted by many in the government, that the status quo should be maintained during transition. The environment secretary wants the UK to immediately leave the common agricultural and EU fisheries policies.

However, some ministers believe May will be able to achieve consensus over Britain’s opening position over the future trading relationship with the EU. They say the bulk of the cabinet backs David Davis’s desire for a “Canada plus plus plus” model.

That would aim to replicate the free trade arrangement between Canada and the EU but add in additional demands, including over the inclusion of services that make up nearly 80% of the British economy.

May will be relieved that her efforts are no longer likely to be overshadowed by a looming second potential parliamentary defeat over Brexit. After an embarrassing loss on Wednesday over MPs having a “meaningful vote” on the final Brexit deal, she was facing an even larger rebellion over government attempts to enshrine the Brexit date of 29 March 2019 in British law.

Rebels including Dominic Grieve and Anna Soubry – and others who did not defy the government this week – have concerns that the move would remove any flexibility if the UK and EU wanted to extend talks.

Grieve made clear that he was fairly satisfied with the amendment over the date, as did another Tory MP, Paul Masterton, who tweeted that he was “pleased to see a sensible amendment”. The former cabinet minister Nicky Morgan, one of the rebels who helped inflict the defeat on May, also gave her support to the compromise over the Brexit date. She said the new amendment “demonstrates how all Conservative MPs can work together” to deliver the best possible Brexit and reflects the flexibility within the article 50 withdrawal process.

Ministers are likely to back a compromise motion laid by Sir Oliver Letwin, and signed by Brexiters including Bernard Jenkin and soft Brexit advocates such as Jeremy Lefroy.



“This seeks to create a sensible arrangement in which the date for leaving is set, but the flexibility contained within the existing treaties is reflected in UK law so that if a little extra time is needed in order to reach agreement on a new deal our parliamentary processes allow that to happen,” said Letwin.



He said ministers were also likely to promise a fresh amendment later in the legislative process that would hand parliament a deciding vote should there be an attempt to change the date and extend article 50.

Labour’s Keir Starmer said the concession of a compromise amendment came after “a car-crash defeat”. “Rumours that PM will now U-turn on gimmick exit day amendment: forced to get a Tory MP to amend her own amendment before its put to the vote,” he said.

A Downing Street source said ministers were looking at the amendment, but the Guardian understands Letwin and others heavily consulted with government figures before laying the amendment, so it is almost certain to be backed.

Jenkin’s inclusion will help reassure Brexiters who may worry that a soft Brexit majority in parliament could be used to attempt to expand the date in the future.

It came after EU leaders ruled that sufficient progress had been made in the first phase of Brexit talks, allowing negotiations to move on to discussions about Britain’s future outside the bloc.



Play Video 1:01 Theresa May hails 'important step' in Brexit negotiations – video

While some questions and outstanding issues over the three opening issues that have so far dominated the negotiations so far remain, a joint proposal from the UK and the European commission to move the talks on has been accepted.

The leaders have also adopted a set of guidelines spelling out their terms for a transition period, and a rough timetable for the next few months, which will see the start of talks dominated by transition.

The Guardian understands that while May is likely to get backing to push for a bespoke deal between a Canada-style FTA and Norway-style option of being inside the European Free Trade Association (EFTA), there are differing opinions over whether that is a realistic outcome.

While some Tory Brexiters argue that the fallback option should be crashing out on World Trade Organisation rules, an increasing number of Tory MPs are starting to suggest that “plan B” should be an arrangement like the EFTA.

Gove’s concerns about transition could result in the first heated clashes in the cabinet. He believes staying inside the fisheries policy, while losing Britain’s place at the EU table, could be damaging because it would allow quotas to be set without the UK having a say.

Although the cabinet is likely to agree on May’s drive for an ambitious and bespoke trade arrangement, unlike any that exist in the world, some experts are wary of the likelihood of achieving that.

Alan Winters, an economics professor at the University of Sussex, said the EU was unlikely to move away from “a number of templates” that already exist, including the deals with Canada and other countries such as South Korea. He argued that services were not a significant part of any trading agreements because they are controlled by regulations that depend on the “precise interpretation and enforcement of those regulations”.

Running out of wriggle room: what do future Brexit talks promise for UK? Read more

“We may be able to add to a little bit more to CETA or a little less on EEA [single market] such as having a register and emergency brake on migration. But populating that middle space – with significant services liberalisation – would be difficult to achieve,” added Winters, who is director of the UK trade policy observatory.

Meanwhile, senior European officials told the Guardian it would not be possible to include services in the deal in a significant way. But British government sources insisted that was their opening negotiating position and there was plenty of space to negotiate from there.

It came as Labour’s leader in the European parliament, Richard Corbett, said colleagues from other countries thought Brexit was slightly less likely to happen after last week’s Commons defeat.

They wondered if parliament could, in 2019, demand a second referendum or to delay article 50.

“They comment that public opinion has not exactly rallied behind the referendum result as might have been expected. Many comment that the chances of Britain changing its mind may have gone up from, say, two out of 10 to three out of 10 and may continue to rise.”

