Philip Hammond is to unlock £2billion of funding to prepare the country for a no deal Brexit, it emerged today.

The Chancellor is handing the funds over to ministers to protect the UK against food and drugs supplies and manage borders if the UK crashes out with no deal.

But the money is being given just at the moment when a no deal Brexit looks to have been killed off by Tory rebels in a night of high political drama last night.

Mutinous Tories backed Dominic Grieve's amendment to give MPs the power to instruct ministers if the PM's Brexit deal is voted down next week.

As most MPs are dead-set against crashing out of the bloc, the move is widely seen as effectively taking no deal off the table.

It was one of three humiliating defeats inflicted on Theresa May last night in the worst hour for a sitting PM in 40 years.

The Chancellor(pictured in Downing St yesterday) is handing the funds over to ministers to protect the UK against food and drugs supplies and manage borders if the UK crashes out with no deal

Mr Hammond said: 'The deal secured by the Prime Minister is the right deal for Britain.

'But as a responsible Government we must prepare for all possible scenarios. In the coming days the Treasury will allocate a further £2billion to departments to bolster Brexit preparations.

63 minutes of mayhem: how May was defeated three times in an hour Theresa May suffered the worst day of any Prime Minister in 40 years in the Commons yesterday as MPs inflicted three defeats on her in barely more than an hour. This is how it unfolded: 4.41pm: The first vote is announced on the Government's amendment to the contempt motion, attempting to kick it into the long grass. Government loses 311 to 307. 4.58pm: The main Labour motion declaring the Government to be in contempt of Parliament is announced. Government loses 311 to 293. It is the first time in history Parliament has done this. 5.44pm: Dominic Grieve's amendment on what happens after the deal is rejected is announced. Government loses 321 to 299. It means when the PM sets out the next steps after losing the vote on the deal, Parliament can re-write the plan with its own priorities for the first time. 5.48pm: Theresa May stands up to make the case for her deal at the Despatch Box. Advertisement

'And it will also put in place additional measures to deal with civil contingency costs in case no deal is reached.'

The money is being spent on EU citizen registration schemes, extra customs staff and trade policy, The Sun reports.

But critics have repeatedly lashed the Government for not handing the money over sooner, saying that the UK should have prepared for no deal properly at the beginning of the talks to get the best deal out of Brussels.

Former Bank of England Governor Mervyn King yesterday lashed the Treasury for not pumping the money into preparations back in 2016.

While the money is being handed over by Mr Hammond just at the moment when a no deal Brexit looks to have been effectively killed off.

MPs passed an amendment to give the Commons the power to instruct ministers if her Brexit deal is voted down next week.

The amendment, pushed by Tory Remainer ringleader Dominic Grieve, gives MPs the power to block a no deal, back a Norway-style deal or even back another referendum.

Brexiteer Tory MP Steve Baker - organiser in chief of the European Research Group of backbench Eurosceptic Conservatives - has said the changes will not be legally binding on the Government.

Commons Leader Andrea Leadsom confirmed it would be published around 11.30am today with 'regret' after Theresa May (pictured in Downing Street yesterday) suffered an historic triple defeat in the Commons.

Mrs Leadsom (pictured in Westminster today) said ministers would follow the orders of Parliament but said it undermined 'decades if not centuries of convention'.

Tory Brexiteer MP Bernard Jenkin told BBC Newsnight last night. 'This is a lot of noise … I don't think anything has changed.'

But if - as widely expected - Mrs May's deal is rejected by MPs at the crunch vote on December 11 and they do pass amendments telling her what to do next, it will pile so much political pressure on the PM she would be unlikely to rebuff the demands.

The future of Brexit is hanging in the balance today after Mrs May suffered a dramatic triple defeat in the Commons in the worst hour for a sitting PM in 40 years.

Amid extraordinary scenes, 26 Tory rebels sided with Labour to push through an amendment that would let MPs step in if her deal is defeated next week.

Mr Grieve claimed it could lead to a second referendum, adding: 'MPs are tonight starting the process of taking back control.'

The Prime Minister also suffered a humiliating defeat over her bid to keep the Government's legal advice on the EU withdrawal agreement under wraps.

Her administration is the first in modern history to be found in contempt of Parliament.

Ministers will publish the full legal advice at 11.30am today, but Commons leader Andrea Leadsom today warned MPs they will live to regret their decision.

She said it undermined 'decades if not centuries of convention' where ministers received advice from the law officers in secret.