Liam Fox's call to leave the European customs union to make free trade deals with countries further afield is like "giving up a three-course meal now in favour of the promise of a packet of crisps", the Government's former top trade official has said.

Sir Martin Donnelly, who was permanent secretary at the Department of International Trade until last year, delivered a withering assessment of the Government's Brexit strategy, saying that attempts to negotiate equal access to EU trade agreements without obeying its rules were "something for a fairy godmother - it's not going to happen".

His intervention comes as the International Trade Secretary was due to deliver a major speech on Brexit, where he will say continued membership of a customs union would result in a "complete sell-out" of Britain's interests.

A major row is brewing over the prospect of continued membership of a European customs union, after Jeremy Corbyn unveiled a dramatic shift in Labour’s Brexit stance in favour of a “new and comprehensive” customs agreement to allow tariff-free trade with the EU.

The move heaps pressure on Theresa May as pro-EU Tory rebels are poised to join forces with Labour to force her to keep the UK in a customs union.

Sir Martin, who will make a speech in London later, said leaving the single market and the customs union would affect 60% of Britain's trade and risks the UK "being shut out entirely" of favourable service agreements.

He told BBC Radio 4's Today programme: "The challenge if we choose not to stay in the single market, is can we negotiate equal access in all those areas of services without agreeing to obey the same rules as everybody else?

"I'm afraid I think that is not a negotiation, it is something for a fairy godmother - it's not going to happen."

Striking new free trade deals with countries like the United States will not compensate for the loss of access to the EU trade agreements, he said.

Sir Martin said: "The example I use is you're giving up a three-course meal, which is the depth and intensity of our trade relationships across the European Union and partners now, for the promise of a packet of crisps in the future if we manage to do trade deals outside the European Union which aren't going to compensate for what we're giving up.

"You just have to look at the arithmetic - it doesn't add up I'm afraid."

However Foreign Secretary Boris Johnson hit back at the calls to stay in a customs union, saying it would leave Britain a "colony" of the EU in a situation that would be the "worst of all worlds".

"You can't suck and blow at once, as they say, we're going to have to come out of the customs union in order to be able to do free trade deals," he said.

Mr Johnson said he disagreed "very strongly" with Sir Martin "of the Brussels commission", arguing that there is an "insatiable" market for UK services outside the EU.

It comes as the Cabinet was due to meet to sign off the UK’s agreed negotiating position with the EU, ahead of Ms May's long-awaited Brexit speech on Friday.

In a speech, Dr Fox will say: "As rule takers, without any say in how the rules were made, we would be in a worse position than we are today. It would be a complete sell-out of Britain's national interests."

Remaining in the existing customs union would mean accepting EU rules on trade in goods without any say in how they are made, he will say.

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A customs union would "remove the bulk of incentives for other countries to enter into comprehensive free trade agreements with the UK", Dr Fox will argue.

He was expected to say: "The inevitable price of trying to negotiate with one arm tied behind our back is that we would become less attractive to potential trade partners and forfeit many of the opportunities that would otherwise be available to us."

Dr Fox is the last in a series of senior Cabinet ministers to make a "Road to Brexit" speech, culminating in a speech by Ms May on Friday where she is expected to set out detail of the plan for "ambitious managed divergence" agreed by her Brexit war cabinet at Chequers last week. The plan is set to be approved by full Cabinet at a special meeting on Thursday.