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Theresa May's ministers said they are prepared to crash out of the European Union without a deal if Brussels rejects the latest blueprint for Brexit.

The Prime Minister gathered her Cabinet at Chequers to thrash out plans for the future relationship with the European Union.

They agreed on a proposal for a UK-EU "free trade area for goods" which would see Britain remain closely aligned with Brussels' rules.

But amid concern from ministers including Brexit Secretary David Davis that his counterpart Michel Barnier and the European Commission will reject the plans, the Government agreed to step up preparation for the collapse of talks.

The Prime Minister has repeatedly said that "no deal is better than a bad deal", but junior business minister Richard Harrington this week warned a "no deal" Brexit would be "completely disastrous for business in this country".

In order for the UK to show it is a credible option to walk away from what is on the table, the Cabinet agreed to intensify preparations.

A summary of the deal reached at Chequers said: "It remains our firm view that it is in the best interests of both sides to reach agreement on a good and sustainable future relationship.

"But we also concluded that it was responsible to continue preparations for a range of potential outcomes, including the possibility of 'no deal'.

"Given the short period remaining before the necessary conclusion of negotiations this autumn, we agreed preparations should be stepped up."

Chancellor Philip Hammond earmarked £3 billion for "no deal" preparations in his Budget in November 2017.

However, the Prime Minister said the Cabinet had agreed a "collective position" on the future of the negotiations with the EU.

"Our proposal will create a UK-EU free trade area which establishes a common rule book for industrial goods and agricultural products," she said.

"This maintains high standards in these areas, but we will also ensure that no new changes in the future take place without the approval of our Parliament.

"As a result, we avoid friction in terms of trade, which protects jobs and livelihoods, as well as meeting our commitments in Northern Ireland.

"We have also agreed a new business-friendly customs model with freedom to strike new trade deals around the world. "

The Prime Minister's Brexit blueprint includes: -The UK committing to "ongoing harmonisation" with EU rules on goods to ensure frictionless trade at ports and the border with Ireland - A "joint institutional framework" would provide for the consistent interpretation and application of UK-EU agreements, with British courts ruling on cases in Britain and EU courts in the EU but a joint committee and independent arbitration settling disputes - A new "facilitated customs arrangement" would remove the need for checks and controls by treating the UK and EU as if they were a "combined customs territory" - The UK would effectively impose EU tariffs at the border for goods intended for the bloc but would "control its own tariffs for trade with the rest of the world" - Free movement of people will end, but a "mobility framework" will ensure UK and EU citizens can continue to travel to each other's territories and apply to study or work

Elements of the plan, which will be formally presented in a White Paper next week, were revealed in a three-page summary.

Mrs May said: "Next week we will be publishing a White Paper which will set out more details of how we will be taking back control of our money, laws and borders.

"Now we must all move at pace to negotiate our proposal with the EU to deliver the prosperous and secure future all our people deserve."

Ahead of the formal announcement of the deal, Tory Brexiteers warned that Mrs May's position could be under threat if she watered down her red lines.-

Leading Brexiteer David Jones, a former minister at Mr Davis's Department for Exiting the EU, said the proposed deal breached all three of Mrs May's red lines of leaving the single market, customs union and jurisdiction of the ECJ.

Describing the plan as "not very good at all", Mr Jones told BBC Radio 4's Today that it would deliver "something less than the full Brexit we have had repeated promises of by the PM and Cabinet members".

Andrea Jenkyns, who quit as a ministerial aide in order to speak more freely about Brexit, said she would be willing to help trigger a leadership contest if the deal left the UK "one foot in, one foot out" of the EU.

"I am not a hypocrite," the Morley and Outwood MP said in an interview recorded for the BBC's Sunday Politics in Yorkshire and Lincolnshire.

"I am standing up for the 17.4 million people who wanted these red lines and who wanted to ensure we did not have a half in-half out Brexit."