BRITAIN might be forced to remain in the EU's customs union beyond the end of the transition period in December 2020 because of the UK Government's “chaotic cluelessness” in setting out its alternative plans, MPs have said.

The cross-party Commons Exiting the European Union Committee issued a withering report on Theresa May's efforts to find a replacement customs system and concluded that extending the current arrangement was the only "viable option" left.

The MPs said it was "highly unsatisfactory" that UK ministers had yet to agree on the trading and customs arrangements they wanted to achieve after Brexit. The pressure is on for them to agree an option ahead of next month’s European Council.

Existing rules are set to be extended during the transition period from the date of Brexit in March 2019 until the end of 2020.

But the Brexit Committee stressed the lack of progress on alternatives and the need to avoid a hard Irish border meant ministers might have to accept an extension for the customs union beyond that date.

On Wednesday, it emerged businesses could be left up to £20 billion worse off if the customs plan favoured by Brexiteers like Boris Johnson and Michael Gove were implemented.

The so-called "max-fac" plan to use modern technology to solve the Irish border question would leave firms facing huge charges for customs declarations and for EU "rules of origin", according to HM Revenue and Customs chief Jon Thompson.

In contrast, the second option - the new customs partnership, favoured by the Prime Minister - would cost a maximum of £3.4bn and might even end up having "a net cost of zero or less".

Yet neither model is expected to be ready when the proposed transition period expires at the end of 2020 and implementation could take until 2024 depending on which option was decided upon; meaning the status quo of staying in the customs union could have to extend beyond December 2020.

No 10 made clear it was the Government’s “intention” that Britain would be out of the customs union by that date.

The Exiting the EU Committee's report noted that, while David Davis, the Brexit Secretary, had ruled out remaining in the customs union, it stressed that "in the absence of any other plan, such an extension will be the only viable option".

Labour’s Hilary Benn, the Committee Chairman, said the UK was rapidly running out of time to get new trade and customs arrangements in place and the UK would “in all likelihood” have to remain in a customs union with the EU until alternative arrangements could be put in place.

In Commons exchanges, Pete Wishart for the SNP said after the HMRC’s intervention on the costs of the customs options it had been a week “in which clueless fantasy finally caught up with hard reality”.

Describing the Government’s max-fac plan as a “unicorn and rainbow” technological solution, the Perth MP asked how much would "this chaotic cluelessness...cost us?”

His Nationalist colleague Peter Grant claimed remaining in the single market and customs union was now the “only sensible path” to protect jobs and prosperity.

Meanwhile, Liberal Democrat MP Tom Brake, speaking on behalf of the pro-EU Best for Britain campaign, said the committee’s report showed Brexit by March 2019 was fantasy, by December 2020 was unachievable and might not be delivered until 2023.

"This is all a total and complete disaster. Brexit is proving costlier, more complicated and more disruptive than anyone had thought. That is why people are entitled to a final say on the deal."

In other developments:

*Commons Leader Andrea Leadsom said MPs would debate the Lords amendments to the Brexit Bill “soon” after Westminster returned from its Whitsun recess in June;

*No 10 said the UK had held "constructive discussions" with the European Commission on staying in the Galileo satellite navigation project and

*Tory MP Andrea Jenkyns resigned as a ministerial aide to Housing Secretary James Brokenshire to focus on securing the "right kind" of Brexit.