A letter – asking top companies to say they “welcome” the Government’s bid for a transitional deal, to cushion the exit – was leaked, apparently after some refused to sign it.
They were also asked to agree that the legislation before Parliament to prepare for withdrawal would “make Britain ready for life outside the EU”.
But some of the companies expressed astonishment at Downing Street’s attempt to win their backing, after the Brussels negotiations hit a damaging impasse.
Embarrassingly, the row came as business leaders publicly attacked proposed curbs on immigration after Brexit, warning they would badly damage the economy.
No 10 did not deny the letter had been distributed to try to bolster its Brexit case. A spokesman said, simply: “No comment on leaked letters.”
Ben Bradshaw, a Labour MP who supports the pro-EU Open Britain group, said the leak had exposed how businesses were opposed to Ms May’s “hard Brexit plan”.
“Just today, businesses in sectors ranging from farming to hospitality have reacted with fury to the Government’s leaked plans to damage our economy by carrying out a draconian crackdown on immigration from the EU.
“And UK businesses have been clear that they value our trade links with the European Union, and that leaving the single Market and customs union will risk damaging our economy.”
Mr Bradshaw added: “It’s pathetic that the Government are reduced to begging companies to sign this letter, when they know there are precious few businesses that support their plan for a hard and destructive Brexit.”
The letter was intended to be signed by “some of the UK’s most dynamic businesses operating in sectors as diverse as technology, financial services and advanced manufacturing”.
It reads: “Some of us personally supported the remain or leave campaigns at last year’s referendum on EU membership, others did not make their positions public.
“But, fifteen months later, we all share an understanding that Brexit is happening, a commitment to ensure that we make a success of the outcome for the whole country, and a confidence that a global Britain has the potential to become one of the most productive economies of the 21st century.
“This month the Government’s Repeal Bill will initiate a programme of legislation that will make Britain ready for life outside the EU.
“We believe this is a good time for employers to work with Government and Parliament to make a success of Brexit and secure a bright future for our country.
“We welcome the Government’s commitment to negotiating an interim period so that firms can ensure they are ready to adapt to the changing relationships and thrive under the new partnership being created with the EU.”
One FTSE executive told Sky News, which was leaked the letter: “There is no way we could sign this given the current state of chaos surrounding the talks.”
Another business source who had seen made a comparison with the “Project Fear” campaign that pro-Remain supporters were accused of waging during the EU referendum campaign.
Andrew Sentance, former member of the Bank of England’s monetary policy committee, tweeted that—based on his recent conversations with UK chairmen and chief executives—he can conclude that “they don’t recognise a Brexit strategy”.
“[The UK’s] approach is incoherent and unpersuasive,” he added.
It is not known which part of Government circulated the draft letter, or whether the Prime Minister herself was aware of the plan to release it.
However, businesses were asked to sign it before the end of this week, suggesting it was to be released before the crunch vote on the EU Withdrawal Bill on Monday evening.
The No 10 spokesman also twice ducked an invitation to say the Prime Minister believed top companies are “onboard” with her Brexit strategy.
Instead, he pointed to “significant investment from abroad” since the referendum result and record levels of employment.