Top ministers will meet on Wednesday and Thursday to thrash out the Government’s approach to the next phase of Brexit negotiations, which will focus on a transition period and a future trade deal.
Sky News understands Wednesday’s meeting will discuss immigration and Northern Ireland.
The run-up to the meetings of a key Cabinet sub-committee has been marked by bitter rows within the Conservative Party over how closely Britain should remain tied to the EU beyond its departure in March 2019.
Brexiteer and Europhile Tories have been left divided over whether Britain should remain in a customs union with the EU after Brexit, and how closely the UK should align itself with Brussels rules in years to come.
The row has forced Downing Street to address confusion over the Government’s position, clarifying Britain will not be staying in a customs union with the EU, but could chase a customs arrangement or a customs partnership with the bloc.
In an open letter to Theresa May on Wednesday, the British Chambers of Commerce (BCC) delivered a stark warning over continued indecision by Government, as the Prime Minister attempts to satisfy both wings of her party.
Representing thousands of UK businesses, the BCC’s president Francis Martin and director general Adam Marshall wrote: “Businesses need those elected to govern our country to make choices – and to deliver a clear, unequivocal statement of intent.
“The perception amongst businesses on the ground, large and small alike, is one of continued division.
“Even amongst the many optimistic, future-oriented firms – those who see opportunity in change – patience is wearing thin.
“Directly-affected companies are poised to activate contingency plans. Many others, worryingly, have simply disengaged.”
The BCC repeated its call for a transition period preserving the “status quo” of UK-EU relations, but pressed the Government to reveal what form of future relationship it will seek with the bloc.
The letter added: “This transition must lead to a clear endpoint. There is no room for continued ambiguity as companies make investment and hiring decisions.
“The Government must set out its plans.”
After delivering her Lancaster House speech and an address in Florence last year, Mrs May has come under increasing pressure to offer further detail on her Brexit strategy.
Recently, The Spectator magazine – often referred to as the “Tory bible” – called on Mrs May to “lead or go”, while on Monday, the EU’s chief Brexit negotiator Michel Barnier declared: “The time has come to make a choice”.
In response to the BCC letter, a Government spokesman said: “The Prime Minister has set out a clear ambition for a deep and special partnership with the EU and we are confident of securing an implementation period that will provide businesses with certainty.”
On the eve of the crucial Cabinet sub-committee meetings, Labour called on the Prime Minister to rethink her previous “red lines” on Brexit negotiations.
The Opposition have said they would not rule out remaining in a customs union with the EU, even though Brexiteers claim this could curb the UK’s ability to sign trade deals with non-EU countries.
The party’s shadow Brexit secretary, Sir Keir Starmer, said: “At every twist and turn of the Brexit process Theresa May has put party politics above the national interest.
“If she ploughs on with this approach then she risks a hard border in Northern Ireland and barriers to trade that would harm the economy.
“Labour has always been clear that the final Brexit deal must retain the economic benefits of our current membership with the EU.
“Options for achieving that should not have been swept off the table, including being in a customs union with our largest trading partner.”
The call for greater clarity on the Government’s Brexit plans came as a group of MPs expressed concerns about the allocation of skills and resources across Whitehall to deal with Britain’s departure from the EU.
In a new report, the Public Accounts Committee (PAC) found “allocation processes have been too slow” in beefing up Government departments for Brexit, as they urged the Department for Exiting the EU to “pick up the pace”.
The cross-party committee also called for “much greater transparency” on which parts of Whitehall are responsible for what parts of Brexit, as well as the costs of delivering Britain’s departure from the EU.
Conservative MP Sir Geoffrey Clifton-Brown, the PAC’s deputy chair, said: “It is one thing to identify the amount of work required to deliver Brexit. It is quite another to do it.
“The Government has identified over 300 work streams to complete as a consequence of the UK’s departure from the EU – a byzantinely complicated task with the potential to become a damaging and unmanageable muddle.
“It is concerning that Government departments still have so far to go to put their plans into practice.”
In response to the report, a Government spokesman said there was a commitment to ensuring that the “right skills and resources are available across all departments”.
“We have repeatedly set out that we are determined to continue recruiting the brightest and the best talent from the public and private sectors and the capability of all departments is regularly reviewed,” they added.