PHILIP Hammond will today launch a thinly-veiled attack on Boris Johnson, warning his party that if the leading Brexiteer became Prime Minister he could take Britain down a damaging ideological path to a no-deal Brexit, which would harm the economy and threaten the Union.

The Chancellor’s words to the annual CBI dinner come as David Mundell is expected to raise concerns about the very real threat to the Union from Britain crashing out of the EU without a deal when the subject is raised at this morning’s weekly Cabinet meeting.

In his address to the CBI annual dinner in London, Mr Hammond will say: “On the populist Right, there are those who now claim that the only outcome that counts as a truly legitimate Brexit is to leave with no-deal.

“Let me remind them: the 2016 Leave campaign was clear that we would leave with a deal. So, to advocate for no-deal is to hijack the result of the referendum and in doing so, knowingly to inflict damage on our economy and our living standards. Because all the preparation in the world will not avoid the consequences of no-deal.”

The Chancellor will tell an audience of 600 business leaders, politicians and journalists that in the face of political polarisation, he will continue to fight for a negotiated Brexit; an outcome that respects the British people’s decision to leave while “recognising there is no mandate for a no-deal exit and that we have an absolute obligation to protect Britain’s jobs, businesses and future prosperity”.

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Without naming the former Foreign Secretary – who recently said it was “still possible that we could go for no-deal” and who is the bookies’ early favourite to take the Tory crown – Mr Hammond will warn colleagues about not resolving the Brexit issue soon.

There is, he will say, a “real risk of a new prime minister abandoning the search for a deal and shifting towards seeking a damaging no-deal exit as a matter of policy…to protect an ideological position which ignores the reality of Britain’s economic interests and the value of our Union”.

This morning, ministers will discuss Theresa May’s “new, bold offer” contained in the forthcoming Withdrawal Agreement Bill[WAB] at the weekly Downing St meeting but doubts remain strong that it will even survive the first Commons vote next month.

This is raising the prospect that the PM’s successor could be faced with a stark choice as the EU Brexit deadline of October 31 nears: a no-deal exit or revoking Article 50 and keeping Britain in the Brussels bloc.

Last week, Gavin Barwell, the PM’s Chief of Staff, raised the threat to the Union from a no-deal exit, telling Government aides that crashing out of the EU would not only create tensions on the Northern Irish border, leading to pressure for a border poll on the reunification of Ireland, but also boost demands for Scottish independence.

Mr Mundell has repeatedly stressed that the “biggest threat” to the Union will be a no-deal Brexit.

One Whitehall insider told The Herald: “A no-deal outcome will be bad in and of itself. It will disproportionately affect Scotland and be bad politically because Nicola Sturgeon will seek to exploit it to boost independence.”

Another Government source explained the WAB would include new measures on protecting workers' rights, an issue where agreement with Labour was said to have been close.

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It is also expected to include provisions on future trade arrangements with the EU, on environmental protections, and on the use of technology to avoid the need for Northern Irish border controls.

Mrs May has previously pledged if the cross-party talks failed, then she would offer a range of votes on Brexit options and, crucially, would abide by the decision of MPs so long as Jeremy Corbyn did the same.

However, the Labour leader responded coolly to the indicative votes suggestion at the weekend and the PM is now said to be “going cold” on the idea because the Opposition could simply refuse to take part.

“What would happen if Labour simply failed to turn up for the votes? It wouldn’t solve anything but you’d have the governing party tearing itself to shreds in public,” noted one official.