Chancellor Philip Hammond told business leaders that a no-deal Brexit could be "taken off the table" and Article 50 "rescinded", according to a transcript of a leaked conference call.
The transcript, obtained by The Telegraph, details Mr Hammond speaking with 11 business leaders just hours after Theresa May lost the parliamentary vote on her Brexit deal.
Mr Hammond began the call by explaining that the defeat raised two questions; can Article 50 be revoked and "whether we can somehow take the option of no deal off the table".
The Chancellor said the EU would not consider extending Article 50 "unless or until we have a clear plan to go forward" and the "large majority" in the commons are opposed to a no-deal "in any circumstances".
He referred to a cross-party Bill, from Tory MP Nick Boles, which aims to force the Government to extend Article 50 if a Brexit deal cannot be reached, according to The Telegraph.
On Monday, MPs will vote on an amendment that will "pave the way for the Bill", the paper said.
Mr Hammond said: "What this group of backbenchers has been doing is seeking to find a mechanism by which the House of Commons can express that view in a way which is binding and effective."
The business leaders sought assurances from Mr Hammond, Brexit Secretary Stephen Barclay and Business Secretary Greg Clark, who were also on the call, that a no-deal could be ruled out.
Doug Gurr, head of Amazon UK, reportedly said ruling out a no deal would give "comfort" to global boards.
But Mr Hammond said it would not be until next week that things became clearer.
John Allan, chairman of Tesco and president of the CBI, asked if taking a no-deal Brexit off the table reduced the UK's negotiating power with the EU.
Mr Hammond said removing options had consequences.
Mr Hammond added: "The Government is not in control of this.
"I am only telling you what information I have been able to glean.
"My understanding is that because the bill being brought forward will simply and solely rescind the Article 50 notice, the legal opinion that they have is that that will meet the test that the European Court of Justice has laid down for unilateral recision of an Article 50 notice.
"It is not within their power to mandate any future course of action, that would be for a Government to do."
A Treasury spokesman confirmed the phone call took place shortly after the vote on Tuesday, but would not confirm any details.