The Prime Minister and 25 ministers outlined their plans for Britain outside the bloc as EU chiefs nervously watched on from Brussels.
Today’s meeting, which as usual took place behind closed doors, may also have allowed Mrs May to face off with fellow Brexiteers Boris Johnson and Michael Gove, who have been accused of undermining the PM in recent days.
It comes after warnings from the EU’s chief Brexit negotiator Michel Barnier regarding his own vision for the UK after Brexit.
He said London would not be granted special financial status and EU passporting rights because such a deal “does not exist” anywhere in the world.
See below for live updates from Westminster and Brussels as they happen.
1.45pm – More details from Cabinet
In the 105-minute meeting, the Cabinet did not discuss the position set out so far by the European Commission’s chief negotiator, Michel Barnier, whose vision of a free trade agreement similar to that struck with Canada in 2016 differs sharply from Mrs May’s demand for a bespoke UK deal delivering a “deep and special partnership”.
And Mrs May’s spokesman said the PM told Cabinet that she was seeking “a significantly more ambitious deal than the EU’s agreement with Canada”.
She also ruled out the option of a Norway-style membership of the European Economic Area as “democratically unsustainable” because it would mean the UK having automatically to observe rules and regulations which it had no influence over.
1.30pm – PM outlines her plans
Mrs May told ministers Britain should be able to set its own rules after leaving the European Union, her spokesman told reporters after today’s meeting.
Her spokesman said: “The PM said it was clear what the cabinet’s objective is: a deal which secures the best possible trading terms with the EU, enables the UK to set rules that are right for our situation and facilitates ambitious third-country trade deals.”
1.20pm – May hosts MAMMOTH Cabinet
Today’s Cabinet meeting was an epic, the BBC reports.
Laura Kuenssberg tweeted:: “Wow, 25 ministers spoke at Cabinet about government Brexit plan.
“Discussion lasted an hour and forty five minutes.”
12.20pm – Falklands at risk?
A former UN ambassador has warned the EU may vote against Britain in Falklands disputes.
Lord Hannay said today Brussels may no longer back the UK on the issue in UN votes.
He said the EU had already stood against British territorial control of the Chagos Islands in the Indian Ocean this year.
Lord Hannay said: “We could have the same phenomenon if and when the Falklands comes before the United Nations at some stage or other in the future.”
11.30am – Lib Dems fined for Brexit campaign breaches
The Electoral Commission has fined the Lib Dems £18,000 after they failed to deliver an accurate spending return during the Brexit referendum.
The EC said: ““The reporting requirements for parties and campaigners at referendums and elections are clear, that’s why it is disappointing that the Liberal Democrats didn’t follow them correctly.
“The major political parties must ensure their internal governance is sufficiently invested in and resourced so they can be sure of meeting their legal obligations. Where the rules are not followed, transparency is lost which is not in the public interest or as parliament intended.”
11.00am – MPs ready to rumble
Boris Johnson and David Davis both looked serious as they arrived at Downing Street this morning.
Mr Davis was speaking rapidly on the phone, possibly getting the latest on Mr Barnier’s comments in Brussels.
Boris Johnson was also photographed looking ready for business as he arrived at No. 10.
10.52am – Barnier’s advisor hits out
A little dig from Mr Barnier’s advisor Stefaan De Rynck this morning.
He has taken umbrage with how Bloomberg reported his Chatham House talk yesterday
Bloomberg posted a link on Twitter this morning today with the headline: “Michel Barnier sets out a hardline EU negotiating position on Brexit.”
Mr De Rynck quoted the tweet and said: “Alternatively correct title: Barnier draws logical conclusion from European Commission April guidelines & UK positions on Brexit.”
10.50am – May sent Brexit warning
The EU’s chief negotiator Michel Barnier has sent Theresa May a dire warning regarding London’s position in a Brexit trade deal.
Mr Barnier said a bespoke trade deal tailored towards financial services “does not exist” anywhere in the world.
It flies in the face of Mrs May’s promises to deliver a trade deal “far better” than the one between Canada and the EU.
More to follow…