Theresa May has called for a crisis summit in order to prepare for a 'no deal' situation, amid fears the row between Brexiteers and Remainers is undermining negotiations with Brussels.
The prime minister told cabinet ministers on Friday morning to be prepared to meet on September 13 to work out a plan for critical areas not yet covered by disaster plans.
The crisis meeting comes as Dominic Raab risked a Cabinet row with Philip Hammond after questioning the worth of economic forecasts about Brexit, days after the Chancellor warned that no deal could cause major damage.
In an interview with the Sunday Times, the Brexit Secretary said that some projections needed to be treated with 'a measure of caution', adding that GDP estimates for 2019 'have been revised up.
Mr Hammond was accused of launching a 'dodgy Project Fear' on Thursday when he suggested that GDP could fall and borrowing could be around £80 billion a year under a scenario in which Britain resorted to World Trade Organisation (WTO) terms after a no-deal Brexit.
Without naming Mr Hammond, Mr Raab told the Sunday Times: 'I'm always chary of any forecast because most of them have been proved to be wrong.'
The newspaper also claimed that the Cabinet will meet to discuss no-deal Brexit preparations over fears that a row between Brexiteers and Remainers was undermining negotiations with Brussels.
Mr Hammond's comments in a letter to Conservative MP Nicky Morgan, chairwoman of the Treasury Select Committee, emerged hours after Mr Raab had attempted to play down the likelihood of a no-deal Brexit while outlining the impact of such a scenario via a series of technical papers.
The Chancellor said that his initial January analysis on GDP and borrowing was undergoing a 'process of refinement' ahead of a parliamentary vote on any deal, noting scenarios which have higher barriers to trade with the EU are expected to have a 'more damaging effect' on the economy and public finances.
He also defended the Government's preferred approach, which was outlined in a White Paper following a Cabinet summit at Chequers, by saying the economic and fiscal impacts of this would be 'substantially better' than no deal.
Meanwhile, a former European Council president Herman Van Rompuy, warned that a no-deal Brexit could cause the United Kingdom itself to collapse.
The ex-Belgian prime Minister told the Observer that crashing out without a deal was an 'an existential threat to the UK itself'.
He added: 'We could end up with a situation in which the EU27 becomes more united and a United Kingdom less united.
'This talk about a 'no deal' is the kind of nationalist rhetoric that belongs to another era.'
A rally was held in Newcastle on Saturday by those calling for a second referendum on the final Brexit deal.
Sir Vince Cable, the Liberal Democrat leader, told the People's Vote event that teenagers aged 16 and 17 should be allowed to take part in any second ballot.
The 2016 vote to leave the EU - which was for those aged 18 and over - was 'imposed on young people to the loss of their futures', he said.
Neither of the two main parties officially back a second referendum despite MPs from across the political spectrum joining with the Lib Dems to back a second poll on the final Brexit deal.
On Tuesday, Labour shadow minister Barry Gardiner warned civil disobedience and social disruption could emerge if a second EU referendum was held, and said the result of the 2016 vote should be respected.
Sir Vince said on Saturday: 'Some say a People's Vote would cause aggro, all the lies of 2016 would be repeated. We need to anticipate that.
'We need an adjudicator who can look at what campaigners say and fact check them properly.
'Brexit has been imposed on young people to the loss of their futures.
This article has been adapted from its original source.