EU steps up no-deal Brexit planning as Cabinet disquiet at Theresa May's strategy grows

EU countries have been urged to step up preparations for a no-deal Brexit - as Theresa May faced growing Cabinet unease over her insistence "no-deal is better than a bad deal".

A document being circulated among ambassadors in Brussels urges countries to up their contingency planning amid fears the Prime Minister will fail to get any deal through Parliament.

It said: "Preparedness work has to intensify in the months ahead at national as well as EU level, as uncertainty remains about the outcome of the negotiations and the ratification of a possible deal."

May - who faced bruising talks with EU leaders last week as she attempted to sell her under-fire Chequers Brexit plan - has repeatedly said she believes "no deal is better than a bad deal".

But The Times reports that Mrs May's Cabinet ministers are increasingly concerned that Britain will crash out of the European Union without a deal "by accident".

Brexit Secretary Dominic Raab, Foreign Secretary Jeremy Hunt, Home Secretary Sajid Javid and Environment Secretary Michael Gove are all said to be lining up to pressure the PM to instead back a Canada-style free trade deal with the EU.

A source told the paper: "We don’t want a no-deal and lots of people think her tactic means we can get there by accident. We think that a Canada deal is better than no deal."

The report came as May faced tough questions from business chiefs about the likelihood of the UK leaving the EU without a deal.

The Prime Minister addressed corporate bosses in New York in a bid to sell Britain as a place to invest after Brexit.

But the group of executives lined up to grill the PM about the EU's exit, with chief executive of investment giant Blackstone warning her that "things could really go off with a bad Brexit".

He asked May: "How bad can things get?"

The Prime Minister insisted the UK could secure a good deal in talks with the EU with the European Union - but admitted there was still "uncertainty" about the outcome of talks.

She told the Bloomberg summit: "Just if I can say this again, we believe that we will and can get a good deal. And that’s because it’s not just about the UK, it’s about the EU as well, and I think that continued trading relationship is going to be good for both sides.

"But there are several weeks of intense work to be done in order to get to that point."

Labour leader Jeremy Corbyn appeared to throw May a lifelife on Wednesday, telling his party conference that Labour would give its parliamentary support to a "sensible" Brexit deal.

He told the party faithful: "If you deliver a deal that includes a customs union and no hard border in Ireland, if you protect jobs, people’s rights at work and environmental and consumer standards - then we will support that sensible deal. A deal that would be backed by most of the business world and trade unions too.

"But if you can’t negotiate that deal then you need to make way for a party that can."

But a senior EU official told Reuters May was "still in her Chequers bunker".

"She needs to shift — but it’s not clear that she can," they added.