Conservative Brexiteers and the Government’s DUP allies refused to be swayed by last-minute assurances over the Irish border backstop and sent her deal to a second crushing defeat, by 391 votes to 242.
A Commons vote will be held tomorrow night on whether to reject a no-deal Brexit.
Mrs May confirmed Conservative MPs would be given a free vote despite insisting throughout the Brexit process that the UK would leave the EU with or without a deal.
A spokesman for European Council president Donald Tusk warned that rejection of the proposed deal for a second time, with just 17 days left until the UK’s scheduled departure “has significantly increased the likelihood of no-deal Brexit”.
Markets-sensitive information was set to be released early tomorrow morning on the import tariffs the UK will impose if it does crash out without a Brexit deal, and on management of the Irish border.
The Chancellor is also expected to set out how the Government will respond to a no-deal Brexit when he delivers the Spring Statement tomorrow.
If MPs reject a no-deal Brexit, they will be asked on Thursday whether to request an extension to Article 50 and delay the UK’s scheduled departure date of 29 March. Mrs May confirmed she would ask Brussels for an extension if ordered to by the Commons, although Downing Street said the Government would only seek a short delay of a few months.
Labour leader Jeremy Corbyn said the Prime Minister’s deal was “clearly dead” and called for a general election.
“The Prime Minister is threatening us all with the danger of No Deal, knowing full well the damage it will do to the British economy,” Mr Corbyn said.
“The Prime Minister has run down the clock and the clock has been run out on her.“
Nicola Sturgeon said the Prime Minister and the government “should be hanging their heads in shame” and demanded that Brexit be delayed and a no-deal outcome ruled out.
“We now have a government that has effectively ceased to function and a country that remains poised on a cliff edge,” the First Minister said.
“Scotland’s needs and voice have been ignored by the UK Government throughout the Brexit process, and today a handful of DUP MPs held more sway over Scotland’s future than our own national Parliament – that demonstrates more clearly than ever that the case for Scotland becoming an independent country has never been stronger.”
Just 38 Tory MPs who helped deliver a record 230-vote defeat for her deal in January changed their minds after a last-minute dash to Strasbourg to secure assurances on the backstop on Monday, and appeals from the Prime Minister yesterday.
“I profoundly regret the decision that this House has taken tonight,” Mrs May told MPs moments after the result was confirmed.
“I continue to believe that by far the best outcome is that the UK leaves the EU in an orderly fashion with a deal, and that the deal we have negotiated is the best and indeed the only deal available.”
The Prime Minister said the country now faced “unenviable choices” even if MPs vote to delay Brexit.
“Let me be clear,” she said. “Voting against leaving without a deal and for an extension does not solve the problems we face.
“The EU will want to know what use we mean to make of such an extension.”
With the EU ruling out any further renegotiation of the Brexit agreement, Downing Street did not rule out bringing it back before MPs if they reject no-deal.
Mrs May told MPs they would vote tomorrow night on a motion that states: “This House declines to approve leaving the European Union without a Withdrawal Agreement and a Framework on the Future Relationship on 29 March 2019; and notes that leaving without a deal remains the default in UK and EU law unless this House and the EU ratify an agreement.”
Amendments over the next two days are likely to include proposals for a second EU referendum, which the Prime Minister admitted was now an option.
EU leaders warned they would not automatically grant a delay to Brexit, which must be approved unanimously by all 27 other member states.
Dutch Prime Minister Mark Rutte said: “Should the UK hand in a reasoned request for an extension, I expect a credible and convincing justification.
“The smooth functioning of the EU institutions needs to be ensured.”
“On EU side we’ve done all that’s possible to reach an agreement,” Mr Tusk’s spokesman said. “It’s difficult to see what more we can do. If there’s a solution to the current impasse it can only be found in London.”