A Brexit plan drafted by Conservative MPs from both the Remain and Leave sides of the party aimed at producing a compromise solution has been branded “problematic” for the Scottish Tories.

The Malthouse Compromise or Plan C, co-ordinated by Kit Malthouse, the Housing Minister, recasts the backstop as a "free trade agreement-lite" with a commitment on all sides that there should be no hard border and that there should be an extended transition period for up to another year to December 2021.

It is backed by former Cabinet Minister Nicky Morgan, Solicitor General Robert Buckland and junior Health Minister Stephen Hammond on the Remain side and Jacob Rees-Mogg and Steve Baker from the European Research Group on the Leave side.

The proposal says that at the end of the transition period “or sooner,” the UK would negotiate fisheries access as an independent coastal state in full control of its own fishing waters.

Theresa May and other ministers have repeatedly insisted Britain will become this from December 2020. However, the EU will undoubtedly argue that if the transition were to be extended, effectively maintaining the status quo, then the UK’s membership of the hated Common Fisheries Policy[CFP] would also be extended to the end of 2021.

One Scottish Conservative MP told The Herald: “This would be problematic for us. I have put my name to an amendment to the Fisheries Bill that calls for an end to CFP membership by December 2020.”

Another pointed out how several Scottish Tories were elected on the back of Brexit and a commitment to leave the CFP, so staying in could be “hugely detrimental” to the Conservative cause north of the border. He also pointed out that leaving the CFP in December 2021 would do the party no favours in the May 2021 Holyrood elections.

David Mundell, the Scottish Secretary, has privately warned the Prime Minister that leaving the CFP in December 2020 is a personal red line; it is thought that if this were extended in any way, then he would resign.

Before Christmas, Mrs May, in a bid to reassure Scottish Tory MPs, wrote a letter to them to underline how the UK would become an independent coastal state from December 2020. However, conspicuous by its absence was any reference to what would happen if the transition period were extended.

Crucially perhaps, Arlene Foster, leader of Northern Ireland’s Democratic Unionists, whose 10 MPs prop up the minority Conservative administration in the Commons, has rowed behind Plan C, saying it provided a "feasible" alternative to the backstop.

"If the Prime Minister is seeking to find a united front, both between elements in her own party and the DUP, in the negotiations which she will enter with the European Union, then this is a proposition which she should not turn her back on," declared Mrs Foster.

She explained: "It also gives a feasible alternative to the backstop proposed by the European Union which would split the United Kingdom or keep the entire United Kingdom in the customs union and single market.

"Importantly, this proposal would also offer a route towards negotiating a future trade relationship between the United Kingdom and the European Union," added the MLA for Fermanagh and South Tyrone.

In the Commons, Mrs May said the Morgan/Rees-Mogg group had put forward "a serious proposal that we are engaging with sincerely and positively".

She added: "We will sit down and work through the proposal that has come forward."

However, some Remainers warned it was most likely to result in a no-deal Brexit.

Tory backbencher Anna Soubry said: "The prospect of the EU ripping up the Withdrawal Agreement or allowing a transition period without the backstop is very remote and for good reason given the risks to the Irish peace process.

"Instead, this scheme backed by Jacob Rees-Mogg is a recipe for the no-deal Brexit that the hard Brexiters have always craved."

Former Government minister Guto Bebb dismissed Plan C out of hand, saying it was “nonsense on stilts to think that that can actually be a way forward at this point in time".

John McDonnell, the Shadow Chancellor, added: "They keep on coming up with things that are about holding the Tory Party together; that is all it is about, nothing more than that."