Theresa May’s Cabinet agreed to implement all the government’s no deal plans despite bitter divisions between cabinet members over whether leaving the EU without a deal would be acceptable.
Several ministers are understood to have signalled they would resign in the event of a no-deal, including Work and Pensions Secretary Amber Rudd, who is reported to have told colleagues: “Just because you put a seat belt on, it doesn't mean you should crash the car.”
Civil servants will work through Christmas on preparations, Downing Street revealed.
A spokesman for the Prime Minister said: “Cabinet agreed that with just over three months until our exit from the European Union we have now reached the point where we need to ramp up these preparations.
“This means we will not set in motion the remaining elements of our no-deal plans.
"Citizens should also prepare in line with the technical notices issued in the summer and in line with further more detailed advice that will now be issued over the coming weeks.”
A £2bn no deal contingency fund will be handed out to the Home Office, the Department for Environment, Food and Rural Affairs, and other Whitehall departments.
Emails will be sent to 80,000 businesses that are particularly vulnerable to the potential imposition of customs duties and regulatory checks, highlighting official advice.
Labour’s shadow Brexit minister, Jenny Chapman said: “It is testament to the Prime Minister’s failure in these negotiations that the Government is now spending billions of pounds of taxpayers’ money to prepare for a no deal Brexit that is rejected by Parliament and many of those sat around the Cabinet table.
“A no deal Brexit would be a disaster for jobs, the economy and the border in Northern Ireland. It is simply not a viable option.”
“The Conservative Government are attempting to scare MPs, businesses and the public with the threat of a no-deal,” Mr Cable said.
“Theresa May is irresponsibly trying to run down the clock so that the only option is to support her discredited deal.”