A controversial official report has been leaked claims the UK will be worse off outside the EU in every scenario has sparked a furious backlash.
The leader of a group of Eurosceptic Conservative MPs Jacob Rees-Mogg said: “It’s the thin gruel of Project Fear reheated and served back to the British people.
“We wouldn’t eat it for breakfast and now we’re getting it for lunch. The Chancellor is continuing to freelance and being a more successful opponent of Government policy than Jeremy Corbyn.”
A Cabinet source said: “It’s Project Fear Mark II but this time the Treasury is hiding behind a cross-Government review. They’re trying to box Boris Johnson and Michael Gove into a corner but it’s backfired spectacularly.”
The cross-Whitehall analysis found economic growth will fall by five per cent over the next 15 years if the UK had a free trade deal, eight per cent if the UK left without a deal and two per cent lower growth if the UK stays in the Single Market.
But officials said while it is being presented as a cross-Government report, it was heavily influenced by Treasury modelling.
The Chancellor is understood to have made the case in Cabinet that the debate over Brexit should be influenced by analysis of economic impact.
Commons Brexit minister Steve Baker said in the Commons that Government forecasts are “always wrong” and the leak was “an attempt to undermine our exit from the EU”.
He said: “It is not yet anywhere near being approved by ministers. Even the ministerial team in my department has only just been consulted on this paper in recent days. We have made it clear it requires significant further work.
“It’s not a forecast for our preferred outcome of negotiations. It does not take account of the opportunities of leaving the EU. I would agitate for a healthy scepticism about the use of mathematical economics.”
It comes as Mr Hammond came under fire for claiming the UK should have as close a relationship with the EU as possible once leaving.
Philip Davies, a Eurosceptic Tory MP, blamed civil servants.
He said: “We have here some London-centric Remoaners in the civil service who didn’t want us to leave the EU in the first place and put together some dodgy figures to back up their case, who still don’t want us to leave the EU and are regurgitating some dodgy figures.”
Theresa May has been blasted for her “meaningless waffle” and slow progress over Brexit talks.
Former trade minister Lord Bridges said: “Four months on and there are still no clear answers to these basic, critical questions. All we hear day after day are conflicting, confusing voices.
“My fear is that we will get meaningless waffle in the political declaration in October. The implementation period will not be a bridge to a clear destination, it will be a gangplank into thin air.”
Sterling took a hit after the dossier leak that strengthened the hand of those on the side of Chancellor Philip Hammond.
While government officials have been quick to stress that the analysis does not cover the option of a bespoke deal, the limited chances of the EU agreeing to such a deal means this has done little to reassure investors.