Pro-Brexit ministers have claimed victory after a key Cabinet committee agreed a compromise deal on the UK's future relationship with the EU in crunch talks.
Members of Theresa May's Brexit “war Cabinet” alongside senior officials including civil service head Sir Jeremy Heywood and the prime minister’s Brexit advisor Olly Robbins met for eight hours of tense discussions at her official residence at Chequers.
After the gathering broke up at 10pm, senior sources claimed that “divergence has won”, meaning the UK will demand the freedom to break free from EU rules after the UK quits the bloc.
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Pro-Remain ministers, such as Philip Hammond and Amber Rudd, had argued that Britain should stick as closely as possible to European laws to avoid causing unnecessary damage to the economy.
But in a major compromise aimed at preserving Cabinet unity, the meeting also refused to put a precise timetable on when Britain would fully take back control of its own rules and regulations.
Instead, the UK will ask Brussels for so-called 'mutual recognition' on standards for manufactured goods as a way of keeping the British and European economies as aligned as possible.
One source told The Sun: "Hammond and Boris [Johnson] are still the two on the peripheries of the argument, and both are still very dug in. Neither are ready to budge yet, so some sort of verbal fudge looks most likely."
May is set to give more details of the government's approach in a major speech next Friday.
Meanwhile, The Times reports that the prime minister is preparing to U-turn on her declaration that EU citizens arriving in Britain during the post-Brexit transition period should have different rights than those who arrive before.