Boris Johnson will on Monday press ahead with new laws that will breach the terms of the Brexit Withdrawal Agreement because Britain needs a “safety net” if trade talks fail.
Mr Johnson will re-insert the clauses, but will make it clear that “safety nets can be removed” if they are no longer needed.
The EU has begun legal action against Britain over the Bill, having said it could not go ahead with a trade deal unless the controversial sections were removed.
Bringing the Bill back before the Commons as trade deal negotiations enter their endgame will be seen in Brussels as an aggressive move by Mr Johnson, but Downing Street insisted the timing was dictated by the parliamentary calendar.
The Bill gives protection to trade across the Irish Sea from interference by the EU. It overrides parts of the Brexit Withdrawal Agreement – known as the divorce deal – which became international law when it was signed by Mr Johnson last year.
It says ministers will have the power to “disapply” rules relating to the movement of goods, including any covered by the Northern Ireland Protocol.
Mr Johnson has said that, if the Withdrawal Agreement stands and there is no trade deal, the EU could effectively ban goods being sold from the mainland to Northern Ireland, meaning the status of the United Kingdom as a single market would be under threat.
A senior Government source said: “We have to go ahead with this tomorrow, but if it becomes clear that the issues can be resolved in a legally binding way as part of a trade deal then the Prime Minister could take out the sections that people object to. Safety nets can always be taken away when they’re not needed.”
Former Prime Minister Theresa May is among those who have spoken out against the Bill, saying it will damage trust in the UK on the international stage. In September, Sir Jonathan Jones resigned as permanent secretary to the Government legal department because he believed the Bill overstepped the mark.
Simon Coveney, the Irish foreign minister, said he regarded the Internal Market Bill as a “negotiating tactic”, adding that if the trade talks succeed the legislation “may find a way of disappearing”.
Mr Johnson will personally decide whether to remove the clauses as the Bill reaches its final stages this week.
On Monday, it will enter the stage known as “ping pong” in which a Bill is passed backwards and forwards between the Commons and the Lords until both Houses oagree. The process is expected to take at least three days. If a trade deal is agreed during that time, the Government would be likely to accept the will of the Lords by not reinserting the clauses.
A senior Government source said: “We had hoped to have reached a conclusion on the trade talks one way or the other by the end of last week. The fact that the Bill is coming back tomorrow is entirely down to the Parliamentary timetable. It is not designed to put pressure on the negotiators.”