GOVERNMENT trade chief Liam Fox today tells hardline Tory Eurosceptics they will have to “live with disappointment” and accept a softer Brexit.

In an interview with The Sun he urged senior Brexiteers like Jacob Rees-Mogg and Theresa Villiers to stop attacking Philip Hammond after he said there should only be “modest changes” to Britain’s relationship with the EU post-Brexit.

7 Trade Secretary Liam Fox told hardline Tory Eurosceptics they will have to “live with disappointment” and accept a softer Brexit Credit: Reuters

And he dismissed their fears of a ‘Brino’ - Brexit in Name Only - declaring that we’ll be out of the single market and the customs union after the two-year transition period.

Mr Fox called for calm among his warring colleagues and unite behind the PM instead of triggering a leadership contest - insisting: “Nothing that would happen would change the parliamentary arithmetic.”

It came as a fresh row broke out with Brussels after Theresa May last night rejected a key EU demand to dictate any new law it likes on Britain throughout the Brexit transition.

7 In an interview with The Sun Liam Fox urged senior Brexiteers such as Jacob Rees-Mogg and Theresa Villiers to stop attacking Philip Hammond Credit: AP:Associated Press

In other developments:

The PM also made it clear she will reject a second bid by Brussels to extend residency rights for all EU migrants for two more years, which could open the door to a million more new arrivals.

The 27 EU states agreed a tough set of conditions for Britain’s transition period from 2019 to 2021 after we leave.

EU Brexit chief Michel Barnier says the UK must accept all EU rules during the transition - but have no say over them.

Company bosses insisted there must have a minimum of a year’s warning ahead of Brexit or they’ll start planning for a no deal and move jobs out of Britain.

Brexit-backing MPs came out to slam a leaked impact assessment document which said we would be worse off outside of the EU

7 Credit: AFP or licensors

Pressure piled on Brexit Secretary David Davis as he backtracked in a row with Ireland - and said anybody could do his job.

Asked what he made about the briefing war against the Chancellor over the weekend, Mr Fox said: “It doesn’t help us for people to be involved in this sort of briefing they were over the weekend against individual colleagues because nothing that would happen would change the parliamentary arithmetic.

“We don’t have a working majority, other than with the support of the Democratic Unionists and we need to accept the reality of that. I know that there are always disappointed individuals but they’re going to have to live with disappointment.”

The blunt appeal from Mr Fox - a long-standing Eurosceptic - and his fierce defence of the pro-Remain Chancellor will enrage many on the party’s right and fuel an already raging party dispute.

7 Pressure piled on Brexit Secretary David Davis as he backtracked in a row with Ireland - and said anybody could do his job Credit: Getty Images - Getty

But Mr Fox also panned Mr Hammond and Boris Johnson for promoting their own Brexit positions in public. The Foreign Secretary widely briefed his plans to use last week’s Cabinet meeting to demand £100million extra for the NHS after Brexit - two days before Mr Hammond sparked fury for calling for Britain to stay close to EU rules.

Mr Fox said it wasn’t “helpful” for them to “put their own positions before the Government's interest and the national interest”.

Mr Fox’s move to pan Tory hardliners signals that even he - the paragon of the Tory right - is softening his stance on Brexit.

He told The Sun what fellow pro-Brexit Cabinet minister David Davis was blocked from saying by No10 last week.

Mr Davis was due to use his Brexit speech on Friday to deliver “home truths” to Tory hardliners and tell them to “suck it up”.

But insiders said No10 had ordered the speech to be watered down to try to ease internal party tensions.

7 Mr Fox also panned Mr Hammond and Boris Johnson for promoting their own Brexit positions in public Credit: AFP or licensors

It came as No10 entered a fresh clash with the EU over the terms of the transition period.

Ambassadors from the 27 EU states agreed a tough set of conditions for Britain’s transition period from 2019 to 2021 after we leave.

The EU’s Brexit chief Michel Barnier said the transition must end after 21 months on New Years Eve 2020, shorter than the more flexible “around two years” that the PM asked for.

A British representative might be invited to discussions about laws that affect the UK specifically, but we will still have no say, Mr Barnier insisted.

And the UK must also accept the full oversight of euro judges through out the period.

Mr Barnier said: “The UK must accept these rules of the game from the outside.

“Otherwise we’d be moving towards divergence and a type of Single Market a la carte which is not possible, certainly not during a transition period which the UK is requesting.”

Barnier's No.2 in Twitter gaffe Brussels’ deputy Brexit negotiator last night risked Number 10’s wrath by sticking the boot into Theresa May over the “vassal state” transition deal. Sabine Weyand, who is Michel Barnier’s number two, liked a tweet which said the terms of the agreement should “bring down the Government”. The social media gaffe is likely to provoke fury in Downing Street, where it will be seen as a dig at Mrs May’s precarious position. Asked whether he is worried about the PM being toppled yesterday, Mr Barnier diplomatically replied: “I’m concerned by the stability of the EU.”

In a united stands, EU leaders back the veteran French politician.

Italy’s EU minister Sandro Gozi added: “If you leave and you decide democratically to get out of the decision making process, as the Brits decided with a referendum, you can’t then be part of it”.

The PM’'s official spokesman said: “We have to agree a way or resolving concerns.

“You would expect some distance between the two sides, on more than one issue. This is the start of a negotiation.”

Brexit Secretary David Davis added: "There will be an argument, I'm sure, about the issue of whether or not we can object to new laws that we haven't had a say in”.

"We take the view that it is not particularly good democratic practice to have your country accept without any say-so anything, and particularly if the EU takes it upon itself to do something which is actively disadvantageous to a major British industry, or something like that."

Under the EU’s rules, Britain will also have to strike its own agreements with more than 70 other countries that the EU has trade deals with to keep them valid for the UK during the transition period.

7 Under EU rules, Britain has to strike its own agreements with more than 70 other countries that the EU has trade deals with Credit: Alamy

But efforts are already underway to ensure that and ministers have said none have objected yet.

Confirmation of the EU’s terms sent tempers among angry Tories spiralling in the Commons yesterday.

Leading Tory backbench Brexiteer Jacob Rees-Mogg, who has insisted taking dictation from Brussels for two years would leave the UK as “a vassal state”, called for the PM to "get tougher" with Brussels, and warned their transition terms would lead to "perpetual purgatory."

Veteran Eurosceptic Sir Bill Cash demanded No10 reject the EU’s “ultimatum” over a transition deal.

The boss of the European Scrutiny Committee said Brussels demands the UK follow EU law for another two years were “inconsistent with us leaving the European Union to which we are entitled”.

7 Leading Brexiteer Jacob Rees-Mogg urged Theresa May to 'get tougher' on Brussels Credit: Rex Features

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In a sign of internal Tory unease about the terms, a Brexit minister was hauled to Parliament to answer an Urgent Question from one of the government's own MPs.

Robin Walker insisted the planned implementation period would be “strictly time-limited” and vowed to keep it “as short as is practicable”.

From the pro-EU end of the Tory party, ex-minister Anna Soubry hit back: “When is the government going to stand up to the hard Brexiteers?

“There’s only about 35 of them.”

David Davis clashing with Rees-Mogg at fiery committee hearing over Brexit

Mrs May’s feuding Brexit war Cabinet also met yesterday to sign off their own transition negotiation plan.

But Downing Street remained tight lipped about what they discussed.

No10 insisted it “did not recognise” reports suggesting the government wanted to lengthen the transition period for up to five years if full trade deal not done.

The news came as Brexiteer MPs stepped up to slam leaked reports which said that Britain would be worse off in every situation outside the EU - but that a trade deal with the US will boost the economy.

The official draft leaked to Buzzfeed said almost every sector would be hit while looking at three scenarios when Britain leaves the bloc.

It suggests UK growth would be 5 per cent lower over the next 15 years compared to current forecasts under a comprehensive free trade agreement with the EU.

But Iain Duncan Smith said it was only a draft and doesn't even look into a bespoke free trade deal, which is what Theresa May wants.

And the analysis also found a trade deal with the US was a definite, and that it would boost GDP by about 0.2% in the long term while trade deals with other non-EU countries and blocs, such as China, India, Australia, the Gulf countries, and the nations of Southeast Asia would add a further 0.1% to 0.4% to GDP over the long term.