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A No Deal Brexit would bring catastrophe to much of the country - with 10% price hikes, a recession and direct rule in Northern Ireland, ministers have been warned in a bombshell leaked letter.

Cabinet Secretary Sir Mark Sedwill, the UK's most senior civil servant, says leaving the EU without a deal would hamper the police and security services, threaten national security, force companies to accept bailouts and undermine the Irish peace process.

Quitting the EU without any sort of trade deal and relying on WTO rules, a move backed by ERG hardliners and some members of the cabinet, would also see a 10% spike in food prices.

The letter emerged as EU chiefs warned the UK is facing the "abyss" with a No Deal looking more likely by the day.

Guy Verhofstadt and Michel Barnier sounded the alarm after MPs rejected four "indicative vote" options for the future last night - leaving Britain in Brexit deadlock.

Theresa Mayis now holding a four-hour Cabinet showdown to discuss either delaying Brexit or crashing out without an agreement on the April 12 deadline.

(Image: AFP/Getty Images) (Image: SWNS)

The 14-page leaked letter, sent by Sir Mark ahead of a cabinet showdown, gives other stark warnings about the reality of crashing out on April 12...

A recession would hit the UK and the pound's depreciation will be 'more harmful' than 2008

Legal authorities and judicial system put under 'enormous pressure'

10% spike in food prices and collapse of some businesses that trade with EU

Government would come under pressure to bail out companies on the brink

Hamper the ability of police and security services to keep people safe

Reintroduction of direct rule in Northern Ireland for the first time since 2007

Theresa May originally summoned the cabinet for a five-hour meeting to try and thrash out an achievable Brexit plan that will carry the support of the House of Commons.

This morning it was announced its length and ambition had been slashed.

(Image: REUTERS)

(Image: SWNS)

Last night, for the second time, MPs failed to back any alternative arrangements for leaving the EU in an indicative vote which failed to give any strong indications for a way forward through the gridlock.

MPs have also rejected Theresa May's Withdrawal Agreement three times and voted against No Deal Brexit and against revoking Article 50.

(Image: PA) (Image: MARK DUFFY/UK PARLIAMENT/HANDOUT/EPA-EFE/REX)

The cabinet session today will start with a meeting of the 'political cabinet' where ministers could discuss the prospect of a General Election.

The Daily Mail reports that Sir Mark's doomsday letter was sent to every member of the Cabinet last week.

It will now be kept in Government files and could be released should a public inquiry be held into the handling of Brexit, which most polls show the public think politicians have bungled.

The newspaper quote the letter as saying: "A No Deal exit would enormously increase pressure on our law and security authorities and on our judicial system. The UK would be less safe as a result of this."

(Image: MARK DUFFY/UK PARLIAMENT/HANDOUT/EPA-EFE/REX) (Image: PA)

The paper claims a source said that Sir Mark's warning on Northern Ireland has convinced the Prime Minister she could not risk taking the UK out of the EU without a deal.

Despite the grave warnings 170 Tory MPs, including 10 members of the cabinet, have urged Theresa May to take the UK out of the EU next week - even if she can't pass a deal.

The Daily Mail says those ministers were Andrea Leadsom, Steve Barclay, Penny Mordaunt, Geoffrey Cox, Gavin Williamson, Brandon Lewis, Sajid Javid, Liz Truss, Chris Grayling and Alun Cairns.

(Image: Leon Neal)

Former Brexit Secretary David Davis said he had previously seen some of the same warnings in private briefings as a privy counsellor.

But the Tory MP told the BBC he thought the warnings were "ridiculous" and a "complete Whitehall scare story".

A No10 official said about Sir Mark's leaked letter: "We don't comment on leaks.

27 EU leaders will now be summoned to an emergency summit in eight days' time to discuss delaying Brexit.

But EU chiefs today warned such a "long" delay would not be approved without a clear new plan from the UK.

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And not only has the UK failed to draw up a new plan - it doesn't even know if it wants to ask for a delay yet.

Theresa May is expected to put her three-times-defeated Brexit plan before MPs yet again in the coming days.

Guy Verhofstadt, the European Parliament's Brexit chief, warned last night: "A hard Brexit becomes nearly inevitable.

"On Wednesday, the UK has a last chance to break the deadlock or face the abyss.”

Long delay or No Deal, Theresa May is likely to face a torrent of resignations whichever option she chooses.

(Image: MARK DUFFY/UK PARLIAMENT/HANDOUT/EPA-EFE/REX)

Former minister David Davis said if the Cabinet chooses a long delay it would be seen as a "route" to stop Brexit, adding of the Conservative Party: "It would tear it apart."

He added: "You would see some bleeding away of people.

"More significantly in immediate terms you would almost certainly have a leadership election of one sort or another very very quickly. And a new leader.

"And I think then all bets are off. It starts again, this process."

(Image: AFP/Getty Images)

With Brexit deadlocked, the Times reported Chancellor Philip Hammond would use today's Cabinet meeting to call for a second EU referendum.

European Commission Brexit negotiator Michel Barnier said the UK now had two options - quit the EU without a deal, or seek a long delay.

He said no deal "becomes day after day more likely".

Mr Barnier said: "The UK may ask for another extension. Such an extension would carry significant risks for the EU.

"Therefore a strong justification would be needed."

He added: "As things stand no the option of no deal looks very likely. I have to be very sincere with you.

(Image: STEPHANIE LECOCQ/EPA-EFE/REX)

"We have prepared for no deal. It's not the option I would have gone for.

"You don't need a negotiator for no deal, do you? You need a negotiator for a deal. And that's what we've done. But we are prepared. We've done some serious preparation for this over a number of months now."

Mr Barnier said the EU had "always said" it could accept a customs union, or a 'Norway'-style soft Brexit.

MPs voted down both options but only by narrow margins last night.

He added "we are ready" to rework the Political Declaration, part of the Brexit deal, if the UK wanted to make soft Brexit happen.

But he warned: "If the UK wishes to leave the EU in an orderly fashion, there's only one treaty available - this one."