The agriculture minister George Eustice has resigned from the government, saying Theresa May’s decision to allow a vote on delaying article 50 would be “the final humiliation of our country”.

Eustice said on Thursday that he would still vote for the prime minister’s Brexit deal but the loss of yet another minister will come as a fresh blow to May, after a revolt in parliament on Wednesday night by Conservative Eurosceptics, 20 of whom voted against an amendment setting out the schedule of votes, with more than 80 abstaining.

Government sources had expressed hope that the threat of a possible article 50 extension would be likely to focus minds among the European Research Group (ERG), the hardline Brexiters chaired by Jacob Rees-Mogg.

Many of the Brexiters who abstained on the amendment on Wednesday night have privately suggested that the threat of a delay to article 50 could make it more likely that May’s deal could pass.

“What she needs is something that substantially changes the attorney general’s legal advice and to win back the DUP’s [Democratic Unionist party] support, I don’t really care what form it takes,” one ERG MP said. “That will turn 110 Tory rebels into 25 to 30 and you could potentially win over that many Labour MPs. But it is a very close thing.”

The ERG has agreed that a group of eight lawyers, seven of them MPs, will scrutinise and pass judgment on the final compromise offered by Geoffrey Cox. Significantly, among them is the DUP deputy leader, Nigel Dodds, whose opinion carries huge weight with Eurosceptic Conservatives on whether to back the prime minister’s deal.

Others in the group are the former Brexit secretary Dominic Raab, and former Department for Exiting the European Union ministers David Jones and Suella Braverman, the veteran Brexiter Bill Cash, and the backbenchers Michael Tomlinson and Robert Courts. The seven MPs will be joined by Martin Howe QC, chair of the pro-leave group Lawyers for Britain.

Number 10 sources suggested it was “extremely unlikely” any deal would be ready to be brought back to the House of Commons next week, meaning MPs are near certain to vote closer to the deadline of 12 March.

Eurosceptic sources said they did not believe a flood of ministerial resignations would follow from Eustice’s departure. The MP, a long-standing Brexiter and former Ukip candidate, said he wanted to be free to participate in debates in parliament in the coming weeks.

In his letter to May, Eustice said he had resigned with “tremendous sadness” and he would vote for May’s withdrawal agreement but said he felt he had “stuck with the government through a series of rather undignified retreats”.

Eustice said he felt the prime minister had been “terribly undermined” by ministers and MPs who did not want to see the referendum result be carried out.

“I fear that developments this week will lead to a sequence of events culminating in the EU dictating the terms of any extension requested and the final humiliation of our country,” he said.

Although he said the prime minister had shown “tenacity and resilience”, he suggested both the prime minister and parliament had lost their nerve. “What our country needs from all its political leaders at this critical juncture is courage, and we are about to find out whether parliament has it,” he said.

Eustice, the MP for Camborne and Redruth, also criticised the conduct of the Brussels negotiators. “I do not believe that the [European] commission has behaved honourably during these negotiations,” he said.

“They have deliberately made progress slow and difficult. They have stated in terms that they will refuse to even hold substantive negotiations on a future partnership until after we leave.

“If the position of parliament is now that we will refuse to leave without an agreement then we are somewhat stuck. This is uncomfortable for everyone, but we cannot negotiate a successful Brexit unless we are prepared to walk through the door.”

Eustice said that MPs should be prepared to vote to leave with no deal and “have the courage, if necessary, to reclaim our freedom first and talk afterwards”.

May spoke briefly by telephone with Eustice before his resignation. In her letter to the former minister after is resignation, May called him “an outstanding champion for the UK’s farming and fishing communities”.

She added: “I agree with you that parliament must now come together and honour the referendum result by voting for a deal which will give businesses and citizens the certainty they need and deserve.”

A former farmer who has been a popular figure in the industry, Eustice stood for Ukip in 1999 and worked on the “no” campaign against the euro. He then worked for the Conservative party under Michael Howard, eventually becoming press secretary to David Cameron when he was leader of the opposition.