Philip Hammond has warned the UK would “fight back” if the EU blocked a Brexit trade deal.

The Chancellor said Britain would not “slink away into a corner” if our demands for market access were not met.

But Theresa May will be told this week that walking away without a deal would be disastrous for the economy.

The International Trade select committee will slam the Prime Minister for threatening to fall back on World Trade Organisation rules in event the EU refuses to accept our terms.

But Mr Hammond doubled down on Mrs May’s stance, saying Britain could survive outside the trading bloc.

Video thumbnail, Tory Chancellor Philip Hammond point-blank refuses to publish his tax return
“If there is anybody in the European Union who thinks that if we don’t do a deal with the European Union, if we don’t continue to work closely together, Britain will simply slink off as a wounded animal, that is not going to happen.

“British people have a great fighting spirit and we will fight back. We will forge new trade deals around the world. We will build our business globally.

“We will go on from strength to strength and we will do whatever we need to do to make the British economy competitive and to make sure that this country has a great and successful future,” he told the BBC’s Andrew Marr show.

Mr Hammond has previously said he was willing to turn the UK into a low-tax, small state country such as Singapore if we failed to get a deal.

However, the Chancellor accepted that Britain may have to pay a hefty divorce bill to smooth any negotiations with the EU.

Philip Hammond on the Andrew Marr show (Photo: PA)

The EU’s chief negotiator Michel Barnier has suggested the UK could be on hook for as much as £52billion to cover pension and budget liabilities.

Mr Hammond disputed the exact amount but said Britain was a “nation that honours its obligations.”

“If we do have any bills that fall to be paid we will obviously deal with them in the proper way,” he said.

The Government is facing a series of revolts over its Brexit strategy. This week the Lords is expected to inflict a second defeat on the Article 50 Bill by demanding Parliament is given a vote on any final Brexit deal – including the chance to stop Mrs May from walking away without an agreement.

Conservative rebel Anna Soubry said she would back the Lords amendment if it returns to the Commons.

She said MPs must get a “proper vote on the outcome of the Brexit talks” and would do everything she could to stop a “potentially catastrophic” exit which sees the UK leaving without a deal.

Minister for Small Business, Industry and Enterprise Anna Soubry arrives in Downing Street
Anna Soubry will back the Lords amendment (Photo: Adam Gerrard/Daily Mirror)

In a further blow to the PM the all-party Committee on Exiting the EU said the Government should protect the rights of EU citizens living in the UK.

Ministers have said the status of EU nationals will only be agreed if they can secure the rights of UK nationals living in other EU countries at the same time.

 But the committee – whose members include leave campaigner Michael Gove – said it was “unconscionable” EU nationals should have to wait up to two years before their position is clarified.But the committee – whose members include leave campaigner Michael Gove – said it was “unconscionable” EU nationals should have to wait up to two years before their position is clarified.

Committee chairman Hilary Benn said they had been left under a “cloud of uncertainty” and did not want to be used as “bargaining chips.” .

“EU citizens who have come to live and work here have contributed enormously to the economic and cultural life of the UK. They have worked hard, paid their taxes, integrated, raised families and put down roots,” he said.