THERESA May’s threat to walk away from the stalled Brexit talks is looking increasingly hollow, after Labour said it was talking to Tory MPs in a cross-party fight against “no deal”.

Shadow Chancellor John McDonnell said he not willing to allow the UK to crash out of the EU, plunging the economy into an uncertain high-tariff trading regime.

He said there was no majority for such an outcome in Parliament, and Westminster would assert its will to stop the UK government going ahead with it.

He told the BBC’s Andrew Marr programme: “I’m not willing to countenance that. I don’t think there is a majority in parliament for no deal.

“I think there are enough sensible people in the House of Commons to say, ‘This cannot happen, we cannot damage our country in this way.'”

Asked if Labour would work with Tory MPs who shared his concerns, he said: “There are discussions going right the way across the House.”

However Chris Grayling, the Tory transport secretary, told the same programme that Mr McDonnell was “talking a lot of complete nonsense” and the UK’s membership of the EU would expire automatically in March 2019, and parliament couldn’t stop it.

He said: “John McDonnell threatening to derail this [Brexit] bill is John McDonnell threatening to create the kind of chaotic Brexit he himself is warning against."

He said it was in the mutual interests of the UK and EU for a deal to be struck, and he was confident it would be, but added Britain would “succeed whatever happens”.

Asked what would happen to food prices if there was no deal, he said farmers would "grow more here" and "we'll buy more from around the world".

Mr McDonnell’s comments came as it was reported a powerful group of MPs had drawn up a plan to block the UK government from proceeding with a no deal Brexit.

Former Tory Chancellor Ken Clarke, Labour, LibDem, Green and SNP MPs in the group want parliament to be able to veto a no deal outcome, possibly via new legislation.

LibDem Brexit spokesman Tom Brake said: "The LibDems will work with any party to stop a 'no deal' scenario and would vote against a 'no deal' outcome in Parliament."

In an attempt to strengthen her negotiating hand in Europe and placate hardline Tory Brexiters, the Prime Minister last week said she would spend £250m on planning for a “no deal” outcome from the Brexit negotiations.

Mrs May has said “no deal is better than a bad deal”, but business leaders, the opposition and many Tory MPs warn it would be a brutal shock to an already fragile economy.

The Northern Ireland party supporting Mrs May’s minority administration, the DUP, also oppose a no deal outcome, as it would mean the return of a hard border with Ireland.

With talks deadlocked after five rounds, and the EU refusing to discuss future trade relations until the Brexit divorce bill is agreed, Brexit Secretary David Davis will go to Brussels on Monday for unscheduled talks on breaking the impasse.

Former Brexit minister David Jones said the UK should suspend negotiations until the EU is prepared to talk sensibly about money and future trade terms.

He told BBC Radio 4: "Until such time as you talk to us we will assume you are not really serious and we will of course have to prepare for life outside the EU in which we will be trading with you on World Trade Organisation terms."

The main Brexit legislation, the EU (Withdrawal) Bill, had been expected to feature in the Commons schedule for the coming week, but has been delayed as the government studies 300 amendments and 50 proposed new clauses.

Shadow Brexit secretary Sir Keir Starmer said the divorce bill should be kept as low as possible and suggested Labour might pay the EU after Brexit for customs union access.

He told ITV's Peston On Sunday: “If economically it's better off to have an arrangement that works for our businesses and secures our economy then we would do it."

SNP Brexit Minister Michael Russell will on Monday attend the first UK-wide joint ministerial committee on the EU since February.

He said he hoped the London meeting would advance Scottish and Welsh government demands for major changes to the EU Withdrawal Bill to stop it undermining devolution.

He said: “It is vital, not just to Scotland but for the whole of the UK, that efforts are redoubled to deliver a breakthrough that will secure a deal that limits the damage as much as possible for individuals and businesses and which protects devolution.”

Tory First Secretary of State Damian Green said he wanted to see progress on agreeing which powers repatriated from Brussels will be shared UK-wide in common frameworks.

He said: “These are important talks on the future of the United Kingdom. I remain committed to delivering a significant increase in the decision-making power of each devolved administration after we leave the European Union."