Mr Mundell said he could not accept a Brexit deal that “threatens the integrity of the United Kingdom”, including any “backstop” plan to prevent a hard border in Ireland that creates a new customs frontier in the Irish Sea.
The EU and UK agreed in December that as a last resort, there would be ‘full alignment’ in regulations affecting cross-border trade to prevent the need for checks along the Irish border.
However, the EU has insisted this can only apply to Northern Ireland, risking a demand from the Scottish Government for special status for Scotland inside the EU single market.
Mr Mundell’s comments followed a stark warning from the new Foreign Secretary Jeremy Hunt that the EU risked damaging relations with the UK for a generation unless it shows more flexibility in negotiations.
During a visit to Berlin, Mr Hunt said that “without a real change in approach from the EU negotiators, we do now face a real risk of ‘no deal’ by accident”.
The Foreign Secretary insisted that the UK would “thrive” in the long term even if there wasn’t a Brexit deal, but said “the only person rejoicing” from the collapse of talks would be Russian President Vladimir Putin.
“My real concern is that it would change British public attitudes to Europe for a generation,” Mr Hunt said. “It would lead to a fissure in relations which would be highly damaging for that great partnership that we have had for so many years, which has been so important in sustaining the international order.”
There were reports that at a meeting with business leaders on Friday, the Brexit Secretary Dominic Raab was told by the UK manager for online retain giant Amazon that a no-deal Brexit would lead to “civil unrest”. The company did not deny the claim, saying it was considering “a wide range of scenarios”.
In a statement released following the meeting, the German foreign ministry said that many of the proposals in Theresa May’s Brexit White Paper “raise questions on both sides of the Channel” which would have to be examined by the European Commission.
German foreign minister Heiko Maas said the UK and all EU members “don’t want a disorderly Brexit, we want an agreement”.
Mr Hunt’s trip to Berlin marks the start of a frenetic round of diplomatic activity as the Prime Minister seeks to build support for her embattled Brexit strategy.
Mrs May is expected to hold talks with the Austrian Chancellor Sebastian Kurz and other EU leaders at a gathering in Salzburg on Friday. The Prime Minister’s de facto deputy David Lidington will travel to Paris while Mr Raab will be in Brussels for talks on Thursday.
The Cabinet met in Gateshead yesterday in a bid to shore up support for the Prime Minister’s Brexit plan, which has come under attack from Eurosceptics and Remainers in her own party.
Mrs May’s proposal to keep the UK inside the single market for goods, effectively maintaining EU regulations over a fifth of the UK economy and making trade talks more difficult, has also struggled for support among the public. A YouGov poll found that just 11 per cent of people would vote for the plan if it were put to them in a new referendum on the EU.
Taking questions from an audience of workers at an engineering firm following the Cabinet meeting, Mrs May said: “The UK is going to do really well post-Brexit. I think there are huge opportunities for us.”
On a visit to a training centre run by Google in Edinburgh, Mr Mundell said: “I don’t want to see a no deal, I don’t think a no deal situation is good for Scotland, good for the United Kingdom but we can’t have a situation where the EU can determine that part of the United Kingdom can be dealt with differently than other parts and one of their offers does do that in relation to Northern Ireland.
“We know the integrity of the UK is very, very important and important to the people here in Scotland so I can’t accept an arrangement that threatens the integrity of the United Kingdom.”