Boris Johnson, Michael Gove and Liam Fox will this week warn against joining a Customs Union with the EU after Brexit in a potentially "explosive" Cabinet confrontation.

The three eurosceptic Cabinet ministers will say that Britain must be able to strike free trade deals after it leaves the European Union as the issue is debated for the first time by senior members of the Government.

Philip Hammond, the Chancellor, Amber Rudd, the Home Secretary, and Greg Clark, the Business Secretary, have argued for a new Customs Union to limit the loss of trade with Europe, reduce the need for new customs procedures and avoid a hard border in Ireland.

However eurosceptics argue that such a move would severely limit Britain’s ability to strike new trade deals with non-EU countries and take advantage of the opportunities of Brexit.

The Prime Minister yesterday refused to rule out signing up to a Customs Union with the EU, with Downing Street later saying that she has an “open mind” on the issue.