Boris Johnson has accused Sir Vince Cable of “peddling lies” about him after the Liberal Democrat leader made reference to rumours the Foreign Secretary may be about to resign.

The heated response came after Sir Vince seized on apparent differences between International Trade Secretary Liam Fox and Chancellor Philip Hammond over plans for a post-Brexit three year transition period for migrant workers in order to brand the Cabinet as being in a state of “civil war”.

The Lib Dem leader added: “There is no Cabinet consensus for moderation. And the rumours of Boris Johnson being about to resign fuel the uncertainty.”

Lib Dem leader Sir Vince Cable. (Aaron Chown/PA)Lib Dem leader Sir Vince Cable. (Aaron Chown/PA)

A spokesman for Mr Johnson said: “Vince Cable is making this stuff up and maybe he should take more time to think up some policies rather than wasting his time on peddling lies.”

“Boris and Philip Hammond are working closely to take the the UK out of the EU and are not going to be diverted from that important task.”

The war of words erupted after Dr Fox insisted unregulated free movement of labour after Brexit would “not keep faith” with the EU referendum result.

Foreign Secretary Boris Johnson and Chancellor Philip Hammond. (Jonathan Brady/PA)Foreign Secretary Boris Johnson and Chancellor Philip Hammond. (Jonathan Brady/PA)

Dr Fox insisted the Cabinet has not agreed a deal on immigration after withdrawal from the EU.

This appeared at odds with Mr Hammond’s signal that free movement would continue for a limited period in all but name with an added element of migrants having to register in the UK.

Mr Johnson has yet to comment publicly on Mr Hammond’s transitional plans.