Brexit Secretary David Davis will today pledge to secure a deal "like no other in history" at the start of EU exit negotiations, as battle rages within his own party over their direction.

Yesterday, the Chancellor Philip Hammond undermined Theresa May on the eve of the talks, saying that the Prime Minister's threat to walk away from a unsatisfactory agreement would be a "very bad outcome".

His comments came just days after he publicly disagreed with Mrs May's 'hard' Brexit plan, which puts controlling migration as the top priority, and said he would focus on the economy, the so-called 'soft' option.

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Labour claimed the Conservative government was engulfed in chaos just hours before talks open.

Business leaders also piled on the pressure for the Prime Minister to change course.

Carolyn Fairbairn, the director general of the Confederation of British Industry, warned: “The needs of the economy need to be at the top of (the government's) list.”

Meanwhile, the SNP said that Mrs May had to capitulate to all-party, all-government talks, after losing her Commons majority in the General Election.

Last night sources said that Conservatives ministers were confident they could get an 'ambitious' deal as a result of the talks.

The UK Government is also keen to present the negotiations as an opportunity for the EU.

But even before discussions begin they have been overshadowed by a row over whether or not the UK will be forced to settle its multi-billion pound 'divorce bill' before future trade deal talks with the EU can start.

During the first day of talks, Mr Davis will say that the UK's desired "destination is clear – a deep and special partnership between the UK and the EU. A deal like no other in history."

But speaking to the BBC's Andrew Marr show, Mr Hammond undermined a key part of the Prime Minister's negotiating strategy.

He said: "No deal would be a very, very bad outcome for Britain, but there is a possible worse outcome and that is a deal that is deliberately structured to suck the lifeblood out of our economy over a period of time."

Mrs May has threatened to walk out of the talks if she thinks the end result will be bad for the UK.

But critics have accused her of issuing empty threats.

Mr Hammond also said that by leaving the EU the UK would leave the single market and customs union.

But experts said that did not mean that the UK could not re-enter the customs union, like Turkey.

Asked about a cross-party agreement, Mr Hammond also said: "We should always try to get a deal that commands the widest possible support".

Tory MP Sarah Wollaston warned Mrs May that she had no parliamentary majority for her planned 'hard' Brexit.

She said: “There is not the parliamentary arithmetic that is going to back a hard Brexit however much some colleagues in both parties would like to see that happen … we are not going to end up, I don’t think, with a hard Brexit.”

Meanwhile, Labour said that the option of remaining a member of the customs union “should be left on the table”.

Labour’s Shadow Brexit Secretary Sir Keir Starmer told the BBC’s Pienaar's Politics said: "There’s a lot of anxiety in the business community about stepping outside the customs union because it creates so many difficulties. That’s why we’ve said it’s an option that should be left on the table. The question of whether in the end we stay in the customs union is one that we need to address when we get to the end of the negotiating process because it will depend on what level of access we’ve got to the Single Market. The question then will be is it better to have freedom to strike new deals across the world or are we better off staying with deals that are struck by the EU. That is something that at the moment we can’t answer."

He added that the eventual trade deal with the EU matters more than any deal as it represents "44 per cent of our trade".

The SNP’s Westminster leader Ian Blackford called for cross-party, cross-government talks.

“With Brexit negotiations set to begin, the election has made it crystal clear that the Tory position of a hard Brexit does not carry the support of the public, and any attempt to plough on regardless will have damaging consequences for Scotland and the UK.

“Theresa May asked the electorate to strengthen her hand, but instead they have cut the Tories down to size – voters gave a clear instruction that the Conservatives cannot govern alone and must now reach out to others."

Meanwhile, Foreign Secretary Boris Johnson appeared to muddy the waters within his own party by backing Scottish Tory leader Ruth Davidson’s call for an “Open Brexit”, but aligning it more to a hard rather than soft outcome.

Over the weekend an opinion poll suggested that Labour voters overwhelmingly support the softest possible Brexit deal.

YouGov found that they prioritised unrestricted trade over immigration controls by a margin of 64 to 19 per cent.

However, 60 per cent Tories backers put migration curbs first, compared to 27 per cent for trade.