The UK is working on options to avoid a hard border with Ireland, according to sources.
One idea is to prolong large parts of the so-called transition phase – which is the period that runs from exit day on March 29 to the end of 2020.
UK negotiators have already proposed a temporary customs arrangement in which the UK would keep the EU’s tariff regime until the end of 2021.
Mrs May’s officials are now looking at proposals to maintain the bloc’s single market regulations in key areas in order to ensure trade slows smoothly.
It comes as analysis from polling experts suggest the party is losing supporters to UKIP after Mrs May’s Chequers plan received a lukewarm response from Brexiteers.
Pollster Matthew Goodwin says the soft Brexit plan could put 25 Tory seats at risk.
The Prime Minister is working against the clock to get a divorce deal to avoid the legal chaos of leaving the union without a deal.
There has not been much progress on the Irish issue since December.
Talks will resume on Thursday in an effort to make progress on the self-imposed October deadline.
Both sides have agreed there needs to be a guarantee to make sure there is no hard border in Ireland after Brexit.
But the UK’s plan is that it will establish such a close tie with the EU that backstop will not be needed.
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3.45pm update: Pound nears 13-month low after no-deal warnings
The pound traded near 13-month lows on Monday, as investors bet on continued dollar strength and uncertainty over whether Britain would secure a trade deal with the European Union before it exits the bloc.
Sterling lost almost two percent of its value last week because of growing unease among investors that Britain was headed for a future without an established relationship with its largest trading partner, the EU.
Warnings this month from Bank of England Governor Mark Carney and trade minister Liam Fox, that the prospect of a no-deal Brexit was growing, triggered the recent slide.
Societe Generale analyst Guy Stear said: “The uncertainly of a ‘no-deal Brexit’ is likely to weigh on the pound, and traders could remain cautious until there is more clarity around the UK’s plans post leaving the EU,”
2.50pm update: Theresa May needs to learn to ‘speak European’ to properly negotiate a Brexit agreement with Michel Barnier and the EU, claims Chatham House researcher
Georgina Wright, Chatham House Research Associate on the Europe Programme, argued that it is not too late for the Prime Minister to adjust her negotiation strategy.
Speaking on CNBC, she said: “There is still very much a credible threat of no deal Brexit.
“Michel Barnier said around 80 percent of the terms of the withdrawal has been agreed but there is still 20 percent that they need to find some agreement on.
“If they do not find an agreement by October or at the latest November there will not be enough time for ratification for March.
“There is a credible threat in that respect so it is perhaps not that positive.”
13.30pm update: Jacob Rees-Mogg challenged by new ‘moderate’ Brexit group
The Brexit Delivery group, which is made up of moderate Conservatives who want to make sure the UK strikes a deal with the EU in March.
Members are Leavers as well as Remainers and it is led by Mr Skidmore and MP for Carmarthen West and South Pembrokeshire, Simon Hart.
Mr Skidmore has urged MPs to unite and warned it was at “risk of becoming self-defined as simply the Brexit party, without a clear domestic offer for the country”.
13.00pm update: No deal Brexit would be ‘WORSE for EU than UK’ – claims BRUSSELS
A secret report has been drawn up by the bloc that shows the EU is increasingly worried about red tape which will slow down the ability of EU countries to respond to challenges – The Times reports.
EU top civil servant Martin Selmayr has been preparing contingency plans.
12.00pm update: Theresa May’s Brexit plans could lead to a Jeremy Corbyn Government
Politics professor and pollster Matthew Goodwin said angry voters could desert the Conservatives parties and switch to UKIP – leaving marginal seats to fall to Labour.
The analysis puts further pressure on the Prime Minister who faces speculation she could face a leadership challenge when Parliament resumes after summer recess.
The Autumn budget is approaching and MPs will have a vote on Mrs May’s Brexit proposals.
Mr Goodwin said the party could lose 25 parliamentary seats.
Mr Goodwin told The Sun: “Prime Minister Theresa May’s Chequers Brexit has gone down like a lead balloon among Conservative voters. Since it was announced, the Conservative Party’s position in the polls has slumped four points while support for Ukip has more than doubled.”
11.45pm update: Conservative vice-chairman Chris Skidmore WARNS of danger over Brexit divisions within party
Mr Skidmore’s warning came as the October deadline approaches for agreement on the UK’s withdrawal deal and a a vote in Parliament on the future UK/EU relationship.
In a warning to feuding Tories from the Remain and Leave wings of the party, Mr Skidmore said: “Together we stand, divided we fall.
“The message is particularly acute as we approach the final stage of Brexit negotiations with the EU.”
Writing in the Daily Telegraph, the Kingswood MP said the history of the 1990s demonstrated the “futility of members of the same political family prioritising division over our duty to serve the country”.
He said that Conservatives must return their focus to domestic policies like public services, tax and controlling welfare bills if they are to “unite our party and win for the future”.