Risk of British backstop remains despite Theresa May’s last-minute deal

Attorney general deals blow to prime minister’s hopes for parliamentary backing on Tuesday

Attorney General Geoffrey Cox leaves from Downing Street on Tuesday. AP.

The last-gasp effort to resolve the impasse over Britain’s departure from the EU on March 29 is in trouble after the government’s legal advice said it did not provide for a clean break in future.

Britain’s Attorney General Geoffrey Cox said there was a “legal risk” that the controversial Irish backstop to prevent a hard border with Ireland could remain indefinitely when the UK leaves the EU, despite the new Brexit agreement on Monday night.

Mr Cox's opinion means the chances of Prime Minister Theresa May’s Brexit plan being voted through parliament have taken a significant hit.

Brexiteers, including those from her own party, are vehemently opposed to any deal that could result in the UK remaining tied to the EU for an indefinite period.

The pound fell sharply from recent highs amid fears of a no-deal Brexit. It plunged 1.43 per cent by 11.30am GMT against the euro and 1.35 per cent against the dollar.

It recovered to a drop of 1.02 per cent by and 0.79 per cent against the dollar by 4.10pm, but it  remained a disatrous day.

MPs are set to vote on Mrs May’s Brexit proposal on Tuesday evening, having overwhelmingly rejected her original plan in January by a record margin.

While a few parliamentarians have intimated they will change their minds, it will probably not be enough for the government deal to pass.

Mr Cox said “the legal risk remains unchanged” that the UK would have “no internationally lawful means of exiting” the backstop arrangement, “save by agreement”.

But he conceded the risk of remaining involuntarily had been reduced.

Mr Cox told Parliament that the new deal would “strengthen and improve the withdrawal agreement” and said it was highly unlikely that an alternative to the backstop would not be agreed to.

A Eurosceptic arm of the Conservative party, known as the European Research Group, whose support the government desperately needs, said the deal was not good enough.

Northern Ireland's Democratic Unionist Party said it could not support the government's new plan, leading Mrs May to warn that Brexit could be lost if the deal was not approved.

She has refused to back any extension to the UK's departure date, telling Parliament she was "certain we have secured the very best changes available".

Opposition leader Jeremy Corbyn urged MPs not to vote for the deal, saying: "It is simply not good enough to vote for a blindfold Brexit."

Labour's shadow Brexit secretary, Sir Keir Starme, said the government's plan was now in tatters.

“The Attorney General has confirmed that there have been no significant changes to the withdrawal agreement, despite the legal documents that were agreed to last night," Mr Starme said.

Naeem Aslam, chief market analyst at TF Global Markets, said: “Sterling took a nosedive on the back of the Cox statement.

"It was his opinion that matters the most. Now that he has made it clear that the recent deal has no weight, the door is wide open for the sterling to move lower against the dollar.

“Another historic defeat is strongly on the cards for Mrs May and all options are on the table with respect to another election or no Brexit at all.”

Mrs May flew into Strasbourg late on Monday for a last-ditch effort to salvage a deal with the EU.

Her frantic trip sparked anxiety among some MPs, who feared they might not have enough time to scrutinise what she agreed to before being asked to vote.

"Is this incompetence or is this just contempt for Parliament?" opposition Labour MP Yvette Cooper asked on Monday.

The UK is set to leave the EU on March 29 after a referendum in 2016 in which a 51.9 per cent of voters opted to leave the world's largest trading bloc.