Theresa May has asked officials to draw up revised proposals for post-Brexit customs arrangements after a key meeting with her most senior ministers. The Brexit sub committee met on Wednesday to try to agree on a new model to replace the UK's membership of the customs union.
One of the government's preferred options - a customs partnership - has faced heavy criticism from Brexiteers. A succession of senior ministers challenged her over this plan in Wednesday's meeting. Two separate sources told the BBC that a narrow majority of ministers expressed fears about the proposal - what some have described as killing it.
But Downing Street denied this, saying the meeting acknowledged there were challenges to the existing proposals but that both the options put forward so far by the UK are still on the table. Mrs. May has now asked for more work to be done on both options.
A 'highly streamlined' customs arrangement: This would minimize customs checks rather than getting rid of them altogether, by using new technologies and things like trusted trader schemes, which could allow companies to pay duties in bulk every few months rather than every time their goods cross a border.
A customs partnership: This would remove the need for new customs checks at the border. The UK would collect tariffs set by the EU customs union on goods coming into the UK on behalf of the EU. If those goods didn't leave the UK and UK tariffs on them were lower, companies could then claim back the difference.
The EU does not appear to be keen on either option.
Earlier Mrs. May told MPs there were a number of ways to deliver Britain's objectives on customs arrangements after Brexit. She says the final arrangement must avoid a hard border between Northern Ireland and the Republic - which is part of the EU - and that a customs border down the Irish Sea would be unacceptable.
On the eve of the Brexit cabinet meeting, Brexiteers urged Mrs May to abandon the partnership option, presenting a 30-page dossier claiming it would make meaningful trade deals impossible to forge and render the UK's International Trade Department obsolete.