An ally of the Prime Minister has fuelled hopes of a second referendum after admitting it was likely to be put to MPs as part of a vote on the deal.

Justice Secretary David Gauke said Theresa May had "made it clear she doesn't want a confirmatory referendum".

But he accepted that it was almost certain that an amendment would be tabled in the House of Commons.

And just 36 hours from a crucial EU summit he admitted the government still don't know if the talks will result in an agreement.

The issue of another vote may form a crucial part of the cross-party talks between Labour and the Tories with reports suggesting the Prime Minister had discussed giving MPs a free vote on a second referendum with members of the cabinet.

Mr Gauke, a Remainer, said the PM had not had that discussion with him.

He played down suggestions that another poll could form a part of an agreement with Labour. 

Instead he admitted that an amendment would likely be added at the point the deal is put to the Commons but did not think it was likely to pass.

"I think there is a point here to distinguish between the talks with the Labour Party that are ongoing and what will inevitably happen as and when we bring a withdrawal agreement bill through the House of Commons is that somebody will bring forward an amendment on whether there should be a confirmatory referendum to the House of Commons which has already voted twice against a confirmatory referendum or second referendum."

Asked if it is something he would support Mr Gauke replied: "I want to be able to respect the result of the referendum and leave with a deal and my view is parliament should support a deal and I hope we can make progress on that.

"I've held the view that a second referendum is more likely to be divisive rather than decisive so that's the position I've held on this particular point.

The issue is far from straightforward for Labour with deep divisions on whether or not there should be a second vote.

Shadow Chancellor John McDonnell said on Tuesday: "What we're trying to do is make sure we arrive at a deal which first of all protects jobs and the economy, we don't think Theresa May's deal does that, and we're also discussing the issue it seems apparently she's raised in cabinet as well, about the issue about going back to the people."

More than 200 Labour MPs voted for an amendment tabled by Peter Kyle which would offer a confirmatory vote on the Brexit deal, 24 opposed it and 16 abstained.

Members of the "Respect the Result" WhatsApp group are worried about the possibility of a second vote.

Keir Starmer, who is leading on the talks from Labour's side reassured MPs that he would not sign off on anything the Parliamentary Labour Party did not support.

He is understood to have said: "“The views of the PLP really matter, ultimately it is your votes that will count.”

Justice Minister David Gauke said of the progress of the cross-party talks: "There are some areas of common ground."

The cabinet minister hinted that the Prime Minister would have to move on her famous red lines to reach an agreement – something Labour say the Tories have so far refused to do.

He said: "To reach a resolution the likelihood is that there will need to be flexibility from all sides but it is worth pointing out for example on the issue of the customs union which Labour have placed great emphasis upon it that the Prime Minister's deal already means that we don't have tariffs, we don't have quotas, we don't have rules of origin requirements in terms of our final relationship with the European Union. 

Mr Gauke denied that it was "effectively a customs union" but said it had "a lot of the very positive attributes that anyone would want in a relationship where we can trade freely with the European Union."

"Our side are keen to engage but I'm hearing that from the Labour side as well."

Meanwhile Theresa May could face a backlash if she sacks a junior minister for addressing a People's Vote campaign rally.

Tory MP Huw Merriman said it was "likely" his appearance at the event in London on Tuesday would cost him his job as an unpaid parliamentary private secretary to Chancellor Philip Hammond.

Mr Merriman voted to put the issue back to the public in a series of free votes on various Brexit options last week.

He told the BBC Radio 4 Today programme he believed it was "the politics of the madhouse" to allow a free vote but then refuse to allow MPs to explain why they voted the way they did.

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