Mr Grayling said the country of around three million people would be able to “dictate” the UK’s terms of trade with the commonwealth. He warned of the stark risks of the UK being locked into a customs union with the EU, such as handing over control of trading policy to the 27 EU member states. MPs could vote on staying within a customs union in series of indicative votes today in Parliament.

Mr Grayling said: “Are we really going to accept the situation where the government of Lithuania has more power over our trading relationship with the Commonwealth than our government does?

“That is the reality of the customs union.”

In an interview with the Telegraph he added: “People who sign up to the customs union are basically signing up to single market as well.

“And that leaves us mostly in the European Union, it certainly does not give us control of our own laws.”

The Transport Secretary has pitched his own opinion about about who should replace Theresa May in a rumoured Tory leadership race.

He said that the party should elect an experienced minister who can then bring on younger colleagues, with a view to stepping down after the 2022 election.

Mr Grayling said: “It may be that we are planning two things rather than one.

“Planning somebody who has got the experience and resilience to get us through the immediate future.”

Meanwhile, Boris Johnson has set out his own pitch for leader, painting himself as a “one nation” Tory who wanted wide-ranging tax cuts.

Mr Grayling added that it was “more likely than not that the next leader will be someone who campaigned for Brexit”.

He said: “The next two or three years are going to be very tough because the European stuff is not going to go away.

“We have got to negotiate a free trade agreement, sort out where we are, but also as we get into the 2020s we are going to have to pass the torch to a new generation.

Contentions over the next steps in the Brexit process threatened to break out this week, with MPs likely to reject Mrs May’s deal for the fourth time.

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