Theresa May is preparing to offer the EU £20 billion in budget contributions until at least 2020 after making peace with Boris Johnson. The Cabinet truce over Britain’s future payments to the EU involves paying substantial sums to the bloc, but no further payments after Britain’s transition period.

It is a compromise between Boris Johnson’s position and that of Philip Hammond, the Chancellor, and is expected to be part of the Prime Minister’s Brexit speech in Florence on Friday.

It came after a frenzied day on which the Foreign Secretary’s allies suggested he would be prepared to resign from the Cabinet over Mrs May’s Brexit strategy, only for him to apparently pull back from the brink after the Prime Minister brokered a truce.

Allies of Mr Johnson had raised the prospect that he was prepared to resign when they said he “could not live with” any deal that involved paying billions of pounds to the EU after the transition period.