Party insiders say they can sense and sometimes hear splits in the government’s team

Even six months ago, the idea of John McDonnell, lifelong scourge of the British establishment, popping in and out of the Cabinet Office at 70 Whitehall on official business would have seemed extraordinary.

Last week, he was down the other end of Whitehall in Trafalgar Square, up on a platform decked with red flags for the traditional May Day rally.

Yet the shadow chancellor is one of the leading figures on the Labour team in the crucial talks that have already gone on for about 20 hours, and were due to reconvene on Tuesday.

Also on Labour’s team are the shadow Brexit secretary, Keir Starmer, whom backbenchers regard as the keeper of the “people’s vote” flame, the shadow business secretary, Rebecca Long-Bailey, and Jeremy Corbyn’s most senior adviser, Seumas Milne.

Facing them across the table are the Cabinet Office minister, David Lidington, the Brexit secretary, Stephen Barclay – who voted against a long extension of article 50 – May’s chief of staff, Gavin Barwell and, at times, the chancellor, Philip Hammond.

Over the weeks since Theresa May announced she would open the door to talks, the two sides have edged cautiously around each other, probing where there might be room for compromise – and if they did make the leap, whether either side could bring their party with them.

Labour insiders say they can sense, and at times quite openly hear, the differences between the respective members of the government’s negotiating team.

Lidington and Hammond appear much more open to compromise than Barclay, for example, and Labour is acutely conscious of the many sceptical voices around the cabinet table that are not represented in the talks at all.

Play Video 0:18 McDonnell likens Brexit talks to dealing with firm going bust – video

Despite the prime minister’s warm message to Corbyn in the Mail on Sunday, saying “let’s do a deal”, Labour insiders are also uncertain about the extent to which the prime minister is willing to sign off on a deal that would inevitably cause a backlash.

And even if she did, no one on either side is under any illusions that she will be around for long. So a significant amount of time has been spent on “entrenchment” – also known as the “Boris lock”.

Ministers have insisted for months they have no intention of ripping up the workers’ rights or environmental standards currently underpinned by EU law, which will be in the gift of Westminster after Brexit.

Lidington told the Guardian last autumn that “the Chequers package represented a strategic choice for continued close alignment with the European model”, and the EU’s level playing field requirements would prevent the UK from becoming “a sort of Shanghai on the Thames or Shenzhen on the Thames”.

But Boris Johnson – let alone a small-state, anti-regulation Tory such as Dominic Raab or Liz Truss – would be likely to take a rather different view. Indeed, “divergence” from the EU’s rules was one of the key demands of those fighting against May’s deal.

Labour wants legislation to constrain May’s successor from ripping up her promises, and privately, government sources admit there are several cabinet ministers who would also like that.

One source familiar with the negotiations said Michael Gove, the Brexiter whom Labour regards as crucial to making any deal stick, also readily understood the demands for “entrenchment”.

On the Conservative side, the participants have tried to assess how serious Labour is about doing a deal and how noisy the clamour is for a “confirmatory” referendum.

Starmer has made it clear from the dispatch box that he believes a fresh public vote must be attached to any deal, but Long-Bailey has struck a markedly different tone, saying if Labour won a string of concessions, she would not insist on a referendum.

Discussions have covered not just government-led changes to the withdrawal act and implementation bill but whether backbenchers could take the lead on some key amendments.

Downing Street has been keen to table the bill, so it can demonstrate progress on Brexit before the European parliamentary elections, in which the Tories face humiliation.

But Labour has insisted it will not wave through the bill at its early stages on a promise of amendments later, and wants to know what concessions the government is prepared to make upfront.

Theresa May’s spokesman has repeatedly said the government is keen to find a “stable majority” for the bill, which will hold through a series of votes at all its stages in parliament.

Both sides have been keen to show they are serious, but government sources now suggest they will have to make a decision, perhaps as soon as this week, about whether the talks are really going anywhere.

And McDonnell had the air of a man getting his excuses in early on Sunday, when he said negotiating with the government was “like trying to enter into a contract with a company going into administration”.