PHILIP Hammond should be sacked, Lord Lawson, one of his predecessors at the Treasury, has insisted, claiming the Chancellor’s actions on Brexit were “very close to sabotage”.

The Tory peer’s remarks came after No 10 insisted Theresa May believed her Chancellor and the rest of the Cabinet were “working well” on Brexit.

But the tensions at the top of Government appearing increasingly evident.

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On Tuesday, there was said to have been a “robust” exchange of views at Cabinet, which No 10 denied amounted to a row but, rather, a brief discussion.

On Wednesday, the Chancellor made clear he was not ready to unlock the Treasury coffers to spend billions of pounds needed to prepare for a “no-deal” scenario and that any spending should be delayed until the last moment. But an hour later the Prime Minister appeared to slap her Chancellor down when she insisted: “Where money needs to be spent, it will be spent."

She announced an additional £250 million would be spent on contingency planning to add to the £400m Mr Hammond announced in his Autumn Statement of 2016.

Tory Eurosceptic MPs have called on him to resign because of his gloomy outlook on Brexit with colleagues branding him an “Eeyore”.

Lord Lawson, who was Chancellor for six years in the Thatcher Government, asked if Mr Hammond was being grossly irresponsible in not preparing for a no-deal outcome until the last moment, replied: “I fear he is, yes…You have to spend money from time to time and there is nothing more important than preparing for what has always been the most likely outcome.”

Suggesting the PM should undertake a Cabinet reshuffle, the Tory peer was then asked by the BBC’s Daily Politics if Mr Hammond should continue in his role. He replied: “I fear not…I fear that he is unhelpful…He may not intend it but in practice what he is doing is very close to sabotage.”

Asked about the criticism of Mr Hammond as a Jeremiah on Brexit, Mrs May’s spokesman said: “The PM thinks the Chancellor and the Cabinet are working well together in all areas and securing that smooth Brexit that everyone wants to see, which is in the interests of the UK and the EU.”

Kwasi Kwarteng, the Chancellor’s parliamentary aide, also sought to play down reports of a Cabinet row over whether money should be spent now on preparing for Britain's exit from the EU without a trade deal.

He said there were "slight differences of opinion" but stressed that the Government was "going to be prepared for every eventuality".

Meanwhile, addressing students in her Nottinghamshire constituency, former Business minister Anna Soubry, a high-profile Remain supporter, said Tory MPs who favoured a hard Brexit should "shut up" and "get behind the Prime Minister".