Brexit campaign group Leave.EU has been condemned by MPs for posting "xenophobic bile" about German chancellor Angela Merkel.

As Brexit talks stood on the brink of collapse, the group, co-founded by Brexit donor Arron Banks, claimed Ms Merkel wanted Northern Ireland to "rot inside the customs union" and told the government to walk away.

An accompanying picture of Ms Merkel carried the caption: "We didn't win two world wars to be pushed around by a Kraut."

The comments drew criticism from cabinet minister Michael Gove, who condemned "any racist and demeaning language against Germany", when it was raised in the Commons.

Independent Group for Change MP Chris Leslie raised the tweet in the chamber as he condemned No 10 for "dog whistle briefing" about a phone call between Boris Johnson and Ms Merkel.

Addressing Mr Gove, he said: "Can I urge the minister to pause and reflect on the deliberate dog whistle briefing put out this morning by No 10 against Angela Merkel, the German chancellor, in the phone call apparently as reported between herself and the PM, which of course has then sparked a series of frankly racist attacks against the Germans from Leave.EU and others.

"This is an extremely dangerous course for the government to embark on."

Mr Gove, who heads up the government's no-deal planning, said the Bundeskanzler and the Federal Republic's government are "good friends" of this country.

He added: "I take this opportunity to entirely disassociate myself from any racist or demeaning language against Germany.

"They are our friends, they are our allies, they are a great country."

Lib Dem Brexit spokesman Tom Brake told The Independent: "This advert is nothing short of insulting and offensive. Language such as this is stoking divisions within our society and should not be considered acceptable. EU citizens are our neighbours, friends and family.

“This demonstrates the depths that Leave.EU will go to as they try and tear our country apart.”

Labour's David Lammy said: "Dear Germany and the EU, please accept our apologies and do not be fooled into thinking Leave EU's xenophobic bile is representative of the UK.

"A clear majority of Brits now oppose Brexit in all its forms. A vast, young and vibrant pro-EU movement in Britain stands with you."

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Mike Gapes, a former chair of the Commons Foreign Affairs committee, said: "This is disgraceful. Apologies to the German people and their government."

The prospect of a Brexit deal has been thrown in doubt, with EU figures accusing the prime minister of engaging in a "stupid blame game" after Downing Street claimed the EU had made a Brexit deal "impossible".

Downing Street claimed German chancellor Angela Merkel had said an agreement was now "overwhelmingly unlikely" in a telephone call with the prime minister.