Controversial legislation which would override elements of Boris Johnson’s Brexit deal with Brussels and breach international law will be published on Wednesday.
Concerns have been raised that key parts of the Withdrawal Agreement, which sealed the UK’s departure from the EU in January, will be overridden by the legislation.
The Prime Minister plans to give Brussels a five-week deadline to agree fresh trade terms or otherwise call for both sides to "accept" no deal and spend the rest of the year minimising the extent of the disruption from the fallout.
Downing Street had insisted changes in the Internal Market Bill were simply "limited clarifications" to protect the Northern Ireland peace process if they failed to secure a free trade deal with the EU.
But Northern Ireland Secretary Brandon Lewis provoked a furious reaction when he confirmed to MPs on Tuesday that the legislation would breach international law in a "very specific and limited way".
His Labour counterpart Louise Haigh described the admission as “absolutely astonishing” and warned it would “seriously undermine” the UK’s authority on the international stage.
The Bill, which will be tabled on Wednesday afternoon, is intended to ensure Northern Ireland can continue to enjoy unfettered access to markets in the rest of the UK.
Mr Lewis said the powers the Government was taking would enable ministers to “dis-apply” the EU legal concept of “direct effect” – which requires the enforcement of EU law – in “certain, very tightly defined circumstances”.
His admission led to Conservative former prime minister Theresa May warning the Government was in danger of losing the trust of other countries that it would honour its international agreements, while Labour described the admission as “absolutely astonishing”.
Sir Keir Starmer urged Mr Johnson not to "reopen old wounds" and to instead “get a deal, move on and concentrate on defeating (coronavirus)”.
The row erupted as the pound plummeted against the US dollar amid fears that Mr Johnson’s chances of securing a post-Brexit free trade deal with the EU were diminishing.
It followed the shock announcement that the head of the Government Legal Department Sir Jonathan Jones had become the latest senior civil servant to quit his post.
No reason was given for his resignation, but the Financial Times reported that he was “very unhappy” with the proposed changes to the Withdrawal Agreement.
The Prime Minister’s official spokesman said: “I can confirm that he is stepping down and we would thank him for his years of hard service and wish him well for the future.”
Meanwhile, the latest round of talks on a post-Brexit trade deal continue in London between the EU’s chief negotiator Michel Barnier and the UK’s Lord Frost.