Andrea Leadsom has insisted a managed no-deal Brexit is possible, as Cabinet divisions were laid bare over a second referendum.
The Commons leader suggested she had been looking at the option as an “alternative solution” to the Prime Minister’s deal, if that cannot get through Parliament.
“No-deal implies that we leave in March and there are absolutely no agreements whatsoever,” Mrs Leadsom told BBC Radio 4’s Today programme.
“But what we already saw yesterday, in the EU’s preparations which they have very belatedly started to make for no deal, is that there are going to be agreements on things like aviation, on things like haulage, on things like tourist travellers and so on.”
She added: “A managed no-deal does not necessarily mean there is no Withdrawal Agreement at all.
“This is all speculation, but what I am looking at is trying to find an alternative that, in the event we cannot agree to this deal, that there could be a further deal that looks at a more minimalist approach that allows us to leave with some kind of deal and some kind of implementation period that avoids a cliff edge, that avoids uncertainty for businesses and travellers and so on.”
But her comments are at odds with those of some of her Cabinet colleagues, including Justice Secretary David Gauke who is understood to have told ministers it was “not a viable option”.
He reportedly said on Tuesday: “The responsibility of Cabinet ministers is not to propagate unicorns but to slay them.”
And in signs of further division, Mrs Leadsom said a second referendum would be “unacceptable” - hours after Amber Rudd suggested there was a “plausible argument” for the public to be asked to vote again on Brexit if MPs remain deadlocked.
Mrs Leadsom told Today: “It’s not Government policy. I myself think it would undermine the biggest democratic exercise ever, where we had a clear majority to leave the European Union.
“To have a second referendum would unfortunately be going back to people and telling them they have got it wrong and they needed to try again.”
The Work and Pensions Secretary insisted she did not want a referendum, and called for MPs across the Commons to reach a consensus as a way of preventing a no-deal Brexit if Mrs May’s Withdrawal Agreement is thrown out in January’s parliamentary showdown.
But her intervention was welcomed as a “massive moment” by campaigners calling for a so-called People’s Vote, with Tory former minister Anna Soubry praising Ms Rudd as “brave and principled”.
Ms Rudd backed the idea of an indicative vote to find which Brexit options MPs would be prepared to support if the Prime Minister’s deal is rejected.
The Work and Pensions Secretary told ITV’s Peston: “I don’t want a people’s vote, or a referendum in general, but if Parliament absolutely failed to reach a consensus I could see there would be a plausible argument for it.”
She added: “Parliament has to reach a majority on how it’s going to leave the European Union.
“If it fails to do so, then I can see the argument for taking it back to the people again, much as it would distress many of my colleagues.”
Ms Rudd said an indicative vote would “flush out” MPs by forcing them to show their support for one option or another, and encourage those whose favoured ideas are rejected to reach a compromise.
“We are going to have to find a way, as MPs, of working together to find a consensus, of agreeing on how to stop no-deal taking place,” she said.
Downing Street dismissed the suggestions by both politicians, with the Prime Minister’s official spokesman saying a second referendum was not plausible.
Asked about Mrs Leadsom’s comments on a managed no-deal Brexit, he added: “The Leader of the House was clear this is not Government policy.
“This is not something that is available. The EU has been very clear that there is no withdrawal agreement available that does not include a backstop.”
Mrs Leadsom later confirmed the Government wants the Brexit deal debate to return to the Commons on Wednesday January 9.
Meanwhile, Ireland followed the UK and the European Union in setting out the latest stages of its no-deal Brexit planning.
“In many significant ways, a no-deal Brexit would pose unique, unprecedented and extremely difficult challenges for the EU, including Ireland, and especially the UK,” the Irish Government document said.
As part of the plan, Dublin Port is creating extra parking for hundreds of trucks from the UK awaiting inspection after Brexit.
In London, Mrs May will meet her Polish counterpart Mateusz Morawiecki for talks.
The discussions are expected to focus on defence and security co-operation, but come as the Prime Minister is desperately trying to secure further reassurances from EU leaders about the Northern Ireland backstop measures in the Brexit deal before the crunch Commons vote in the week commencing January 14.