16:35

Downing Street issued a stark warning on the customs union after comments by the Home Secretary suggested it may still be up for discussion.

“The government is absolutely clear and without ambiguity that we are leaving the customs union and not joining a customs union,” Theresa May’s spokesman told reporters. He went on:

It’s the position of the prime minister, the cabinet and the entire government that we will be leaving the customs union and be free to sign our own trade deals around the world.

Number 10 said there was “a discussion around the issue of which two customs options the government opts for - but are we leaving the customs union? The answer is categorically yes.”

Rudd had issued a clarification on Twitter which still left some room for manoeuvre - ruling out remaining in the EU customs union but offering no comment on joining a new customs arrangement with the EU.

Downing Street said Rudd and May had not spoken since the lunch with journalists and insisted Rudd had not been told to clarify her remarks.

May’s spokesman also refused to rule out that the government re-using the phrase “hostile environment” which Rudd has said she felt uncomfortable with.

“I can’t predict the phrases individuals ministers will use,” he said.

However, Downing Street did back Rudd’s decision to drop the removals targets.