Theresa May should prepare for no-deal Brexit, donors warn

Updated: 

Senior Conservative Party donors have said Theresa May should be prepared for a "no deal" Brexit rather than accepting an "unsatisfactory and unfavourable deal" that could cause divisions for another generation.

One donor said he feared some pro-Remain ministers were suffering from Stockholm syndrome - where hostages develop trust for their captor - and were "keen to increase" Britain's "fragility", the Observer reports.

Another told the paper that David Cameron's failure to secure major concessions over Britain's membership of the EU before last year's referendum showed the dangers of accepting a bad deal.

The warnings come after pro-EU MPs said businesses would face the "cliff-edge" break which they had long feared if Britain walked away from Brexit talks.

Countdown to Brexit: key events
(PA graphic)

Michael Farmer, a Tory peer and former party treasurer who has given millions to the Conservatives and the Leave campaign, told the Observer: "It is worth recalling the paltry offer that Cameron came back with, which was an important factor in persuading people to vote out.

"If another unsatisfactory and unfavourable deal is done with the EU negotiators, the divisive issue of Europe will not go away but smoulder on for another generation."

He added that no deal could "free" and "challenge" Britain to take advantage of new possibilities and opportunities.

Jeremy Hosking, the Vote Leave and Conservative donor, stressed the need for "robust no-deal contingency planning" in light of a lack of progress in trade talks with Brussels.

He told the paper: "The EU is stonewalling on the divorce bill, increasing intolerably the political pressure on Mrs May, and we still have no idea whether the trade deal will be beneficial to the UK, or whether they will kick us further in the teeth when we are down."

Suggesting a link with Stockholm syndrome, he added that some ministers were doing nothing to help Britain escape from its "vulnerable position".

Earlier this month, EU negotiators said talks between the two sides had stalled, with trade discussions likely to be delayed by months, increasing the chance of no deal being agreed.

The Department for Exiting the European Union said negotiations were being approached in a "constructive way", but that it was the "duty of a responsible government" to plan for a range of scenarios.