The Prime Minister is to hold crisis Brexit talks with German Chancellor Angela Merkel on Tuesday.

The move follows a day of high drama at Westminster which saw Theresa May cancel a vote on her Brexit plans because she faced a “significant” defeat.

May will also meet Dutch Prime Minister Mark Rutte in The Hague on Tuesday in a bid to gain reassurances on the exit deal from European leaders ahead of a crunch EU summit on Thursday.

The PM was forced to abandon the Commons vote as the scale of opposition to the Brexit deal, especially regarding proposed backstop arrangements for the Irish border, threatened a crushing rejection of her plans.

In a statement to MPs, May also said the Government was stepping up preparations for a possible no-deal Brexit, despite saying that this would cause “significant economic damage to parts of our country”.

Labour leader Jeremy Corbyn said the Government was “in disarray” and told May she should step aside if she was unable to deliver the “fundamental changes” needed to her plans.

More than 50 Labour MPs and peers wrote to Corbyn urging him to call a vote of no confidence in May as Prime Minister, while Nicola Sturgeon and Sir Vince Cable assured him that the SNP and Liberal Democrats will back him if he does.

But Labour made clear it will hold back on a confidence motion until after May returns to the Commons with whatever assurances she secures from EU leaders.

“We will put down a motion of no confidence when we judge it most likely to be successful,” said a Labour spokesman.

If May brings her plan back to the Commons without significant changes, “she will have decisively and unquestionably lost the confidence of Parliament on the most important issue facing the country, and Parliament will be more likely to bring about the general election our country needs to end this damaging deadlock.” 

Sterling tumbled to a 20-month low following May’s announcement, hitting its lowest level since April 2017.

Versus the US dollar, the pound was trading at 1.25 in evening trade, a fall of 1.1%. Against the euro, sterling shed 1% to hit 1.10.

European Council president Donald Tusk announced that Brexit has been added to the agenda of a two-day EU summit in Brussels taking place on Thursday and Friday.

Tusk said: “We will not renegotiate the deal, including the backstop, but we are ready to discuss how to facilitate UK ratification. As time is running out, we will also discuss our preparedness for a no-deal scenario.”

And a spokeswoman for European Commission president Jean-Claude Juncker poured cold water on any prospect of a renegotiation of the Withdrawal Agreement.

Speaking ahead of May’s statement, the spokeswoman said: “This deal is the best and only deal possible. We will not renegotiate.”

Irish Prime Minister Leo Varadkar ruled out reopening talks around the backstop, saying it was not possible to reopen any aspect of the Withdrawal Agreement without reopening all of it.

Addressing the Commons, the Prime Minister accepted that there was “widespread and deep concern” among MPs over the backstop arrangement, designed to keep the Irish border open if the EU and UK fail to strike a wider trade deal.

But she insisted that there was “no deal available that does not include the backstop”.

And she said that none of the alternative outcomes – a second referendum, the so-called Norway-plus membership of the single market and customs union or no-deal Brexit – could command a majority in the House.

May said she still believed there was “a majority to be won” in favour of the Withdrawal Agreement and Political Declaration on future EU/UK relations agreed with Brussels after more than 18 months of negotiations.

And she said: “It is clear that this House faces a much more fundamental question.

“Does this House want to deliver Brexit? And if it does, does it want to do so through reaching an agreement with the EU?

“If the answer is yes, and I believe that is the answer of the majority of this House, then we all have to ask ourselves whether we are prepared to make a compromise.

“Because there will be no enduring and successful Brexit without some compromise on both sides of the debate.”

The Government was also looking at “new ways of empowering the House of Commons” to ensure that any provision for a backstop has “democratic legitimacy and to enable the House to place its own obligations on the Government to ensure that the backstop cannot be in place indefinitely”, said May.

The remaining two days of a planned five-day debate on May’s proposals will be deferred, along with votes on the deal, to a date yet to be fixed.

This was being done by a parliamentary procedure which does not require approval from MPs, despite Speaker John Bercow saying it would be “discourteous” to do so.

Downing Street was unable to give any indication of when the vote will now be held, saying that this would depend on how quickly May is able to secure the assurances which will satisfy MPs.

A spokesman said there was no plan to extend the two-year Article 50 process under which the UK will leave the EU on March 29 2019, whether or not there is a withdrawal deal.

She was briefed on the likely scale of her defeat by chief whip Julian Smith on Monday morning before deciding to “consult” Cabinet colleagues in a conference call on her decision to defer the vote.

A Downing Street source said that the PM received “strong support” from Cabinet ministers for the postponement, with none opposing the decision.

To cries of “resign” directed at the Prime Minister from the Labour backbenches, Corbyn told the Commons that “fundamental flaws” in May’s proposals meant she could not simply bring it back next week or in January and hope to win MPs’ approval.

“The Government is in disarray, uncertainty is building for business, people are in despair at the state of these failed negotiations and concerned about what it means for their jobs and communities – and the fault of that lies solely at the door of this shambolic Government,” said the Labour leader.

And the Prime Minister was accused by veteran Labour MP Dennis Skinner of being “frit” and “handing over power to the EU”.

Conservative Brexiteer Andrew Bridgen was heckled by some colleagues as he said May had “lost the trust and credibility” of the Commons, the country and the EU.

The dramatic developments occurred as the European Court of Justice ruled that Britain can unilaterally halt the Brexit process by revoking the Article 50 letter declaring its intention to leave the EU.

The usual Tuesday Cabinet meeting will be held later in the week due to May’s travel plans, Downing Street said.