THERESA MAY claimed today her policy on post-Brexit customs arrangements was “evolving” after critics said she had been “held hostage” by her own Cabinet over the existing plans.

The Prime Minister spoke ahead of a meeting of her Brexit “war Cabinet” after senior ministers made clear their deep divisions over two options currently on the table regarding the customs union and the Irish border.

Around 60 anti-EU Tory backbenchers, led by Jacob Rees-Mogg, have put their name to a report by the European Research Group that rejects both plans.

Group chairman Mr Rees-Mogg denounced the arrangements as “cretinous,” but he denied that he was giving Ms May an “ultimatum.”

Downing Street has been warned that the government could collapse over the customs partnership plan because, in addition to the back-bench rebellion, the Cabinet is split over the proposal.

Under the customs partnership plan, Britain would collect tariffs on behalf of the EU on imports subsequently passed on to anywhere else in Europe.

British firms would be able to claim rebates on goods that did not end up going to the EU. 

The second plan is a streamlined arrangement using new technology to avoid the need for border checks.

The European Commission rejects both ideas.

Ms May was challenged by Labour MP Karen Buck at Prime Minister’s Questions on why she was considering two options that the EU says aren’t “feasible.”

She vaguely responded that there were “a number of ways” of delivering commitments to leave the customs union.

When her official spokesman was asked whether this meant that more than two options were being considered, he said: “Work has been ongoing on two options. That work has been proceeding. Ideas are obviously evolving as we go along.”

It is believed that Ms May is seeking to prevent resignations from her Cabinet by keeping her options open.

Labour’s shadow Brexit minister Paul Blomfield said: “This is yet further evidence that Theresa May is being held hostage by the extreme Brexiteers in her party.

“Crunch time is coming on what our future customs arrangements with the EU should look like.

“Labour has been clear that the best way to protect jobs, the economy and avoid a hard border in Northern Ireland is by negotiating a new comprehensive UK-EU customs union after Brexit.”