The UK will sign up to European Union (EU) regulations on a “voluntary” basis but hopes it will be able to “diverge” from the bloc’s rules in some ways, the Cabinet has concluded.

After the crunch talks at the Chequers estate, both the Brexiteers and Remainers in the Cabinet claimed to be satisfied with the result — although the staunchly anti-Brexit Chancellor Phillip Hammond was said to be “shocked”, The Telegraph reports.

According to the agreement, the UK will follow EU rules in areas such as the automotive industry to maintain trade but branch out in others on a sector by sector basis. Theresa May has dubbed it the “three baskets” approach.

Health Secretary Jeremy Hunt, who was not at the meeting, told BBC Radio 4’s Today programme: “The central common understanding is that there will be areas and sectors of industry where you agree to align our regulations with European regulations.”

He added: “But it will be on a voluntary basis; we will as a sovereign power have the right to choose to diverge and what we won’t be doing is accepting changes in rules because the EU unilaterally chooses to make those changes.”

Pathetic to see both warring Cabinet factions claiming victory while No 10 claims unity.There are irreconcilable problems at heart of Brexit — Alastair PEOPLE’S VOTE Campbell (@campbellclaret) February 23, 2018

However, the EU has already reaffirmed its uncompromising approach on regulations and ruled out “three baskets” in updated negotiating guidelines, insisting the “integrity” of the Single Market must not be challenged and demanding Britain accepts all of its rules to access markets.

“UK views on regulatory issues in the future relationship including ‘three-basket approach’ are not compatible with the principles in the EuCo guidelines,” the document states.

“Three baskets is dead and she [Theresa May] knows it is dead,” one EU diplomat told The Telegraph.

“You’re either in the Single Market or you are not. There’s no mixing,” another EU source added.

I have tabled an amendment with @Anna_Soubry and MPs from cross-parties that would commit government to staying in a Customs Union after Brexit. We believe it has the support to pass. I explained on the @BBCr4today programme this morning: pic.twitter.com/xX8l6lWB6Y — Chuka Umunna (@ChukaUmunna) February 23, 2018

The meeting comes as Labour leader Jeremy Corbyn prepares to announce in a speech on Friday that his party is ready to support tying Britain to a customs union with the EU, likely leaving it unable to strike free trade deals independently.

Corbyn’s MPs are expected to vote for an amendment tabled this Monday by anti-Brexit Tory MP Anna Soubry and Labour MP Chuka Umunna that would force the Government to form some version of a customs union with the bloc.

The whole dispute has led many Brexit supporters to simply make a clean ‘No Deal’ exit from the bloc as soon as possible, dealing with under standard World Trade Organization (WTO) terms and compensating any firms impacted in the short term through savings on the multi-billion divorce bill which a deal would have included.