The Prime Minister is set to face down rebel MPs who want to stay in the EU customs union permanently.
But in return she will demand that Brexiteers swallow an extension in ties until 2023.
The high-stakes move emerged as the Times reported that the government will bring the crucial EU Withdrawal Bill back to the Commons within weeks – paving the way for a potentially decisive showdown.
Downing Street insisted today there would only be a single transition period that ends in December 2020.
In other developments, Labour leader Jeremy Corbyn claimed today there was a majority in the Commons to keep Britain in a customs union with the EU.
Theresa May (pictured in the Commons yesterday) has been scrambling to hold her party together amid increasingly bitter infighting over Brexit
Mrs May has been scrambling to hold her party together amid increasingly bitter infighting over Brexit.
The Cabinet has been split on whether to back a ‘Maximum Facilitation’ customs scheme, favoured by Boris Johnson among others, which would rely on technology and trusted trader schemes to keep borders fluid.
Other ministers, including Mrs May, have been urging a ‘customs partnership’ that would see Britain collect duties on behalf of the EU and then offer businesses a rebate.
Corbyn claims he has a Commons majority for his customs union plan
Jeremy Corbyn claimed today there is a majority in the Commons for his plan of keeping a customs union with the EU after Brexit.
Recreating similar arrangements on cross border trade would likely allow existing business ties to continue unchanged – but would also probably block Britain’s ability to strike new trade deals.
The Labour leader insisted the Brexiteer vision was a ‘pipe dream’.
Speaking in Belfast he said: ‘Labour will not support any Brexit deal that includes the return of a hard border to this island. But we are also clear there must be no border created in the Irish Sea either.
‘That is why Labour has put forward a plan that would go a long way to solving this issue, a plan for which I believe there is a majority in Westminster.’
However, at least a dozen Tory backbenchers are thought to be ready to join Labour in demanding the UK stays in a full customs union – enough to overturn Mrs May’s wafer-thin Commons majority.
They say keeping close ties is the only way to prevent harm to the economy and avoid a hard Irish border.
Brussels has dismissed both the government