With the prospect of talks breaking down before Christmas still a strong possibility, the Brexit secretary is understood to be preparing to put the case that leaving without a deal could still bring huge benefits for Britain.
It follows revelations in the Daily Express that international trade secretary Liam Fox has also prepared a report on the benefits of just going to World Trade Organisation rules without a formal deal.
The Government last night played down the reports that Mr Davis is preparing to make a presentation to colleagues but it is understood that he hopes to persuade cabinet Remainers such as Chancellor Philip Hammond that no deal will not be a disaster.
The revelation comes as senior barrister Martin Howe, the chairman of Lawyers for Britain, has warned that a transition deal and agreement over customs rules proposed earlier this year by Theresa May could “leave Britain as a vassal state” under EU control.
In the first detailed analysis of the Government’s policy papers on the Northern Ireland border and customs relationships, Mr Howe warned that Britain could find itself having its rules set by Brussels without having a seat at the table by “shadowing” EU customs rules.
He told the economic forum Politeia: “It is fine to have an agreement with the European Union which contains mutual recognition of standards and so forth but in principle we should not agree anything with the European Union that we could not agree with another third country. We should not lock ourselves into an obligation to import EU standards on everything.
“That is the touchstone between leaving the EU and becoming an independent country or being a vassal state.”
Meanwhile, a paper by Margaret Thatcher’s former advisor Patrick Minford and others at Economists for Britain, argues that “no deal is the best deal” and could be worth £135 billion a year to the British economy with free trade deals and deregulation.
Meanwhile it is estimated that if tariffs are imposed the EU will have to pay £13 billion to the UK, almost treble the £5 billion British firms would pay to Brussels.
Responding to reports that Mr Davis was planning to present a “no-deal” plan to Cabinet, a spokesman for the Department for Exiting the EU said: “It is in everyone’s interests to secure a good deal for both sides.
“We think that is by far and away the most likely outcome, but we have a duty to plan for the alternative.”