Britain will refuse to pay the £39billion divorce package to the EU if it does not compromise on a trade deal, the new Brexit Secretary vowed today.
Dominic Raab upped the ante in negotiations by warning that there will be 'conditions' built into the cash settlement in the UK's Withdrawal Agreement with the bloc.
He also slammed 'irresponsible' scaremongering from Brussels over the consequences of no deal Brexit - and made clear that the government is ramping up preparations in case the EU does not display 'goodwill'.
The threat came after the EU's Michel Barnier delivered a withering rebuttal of Theresa May's Brexit plans, suggesting they will be unacceptable.
But Mr Raab - who met Mr Barnier last week for the first time since being appointed to the key job - made clear that failure to strike a trade deal will result in Britain refusing to pay up.
Dominic Raab - pictured left meeting Michel Barnier last week for the first time since being appointed to the key job - made clear that failure to strike a trade deal will result in Britain refusing to pay up
Article 50 requires, as we negotiate the withdrawal agreement, that there's a future framework for our new relationship going forward, so the two are linked,' Mr Raab said in an interview with the Sunday Telegraph.
'You can't have one side fulfilling its side of the bargain and the other side not, or going slow, or failing to commit on its side.
'So, I think we do need to make sure that there's some conditionality between the two.'
Pressed on whether he would put such a provision into legislation, Mr Raab said: 'Certainly it needs to go into the arrangements we have at international level with our EU partners. We need to make it clear that the two are linked.'
Asked about comments from Brussels that a no deal scenario would mean there would be no specific arrangements in place for UK citizens living on the continent, or for EU migrants in Britain, he said: 'Well, I think that's a rather irresponsible thing to be coming from the other side.
'We ought to be trying to reassure citizens on the Continent and also here.
'There is obviously an attempt to try and ramp-up the pressure.'
Mr Raab said he would be returning to Brussels on Thursday for more Brexit talks.
He said: 'If it's reciprocated, the energy that we are going to bring to these negotiations, the ambition, and the pragmatism, we (will) get a deal done in October.'
Mr Raab refused to be drawn on claims that the government has been stockpiling food and medicines.
However, he insisted 'any responsible government' would be planning for all possible outcomes.
As Tory tensions flared again today, Mr Raab's predecessor as Brexit Secretary, David Davis, urged MrsMay to tear up her Brexit plan and start again.
Mr Davis unleashed another salvo at the PM's Chequers blueprint - which would see the UK obey a 'common rule book' with Brussels and collect some taxes on behalf of the bloc.
In an interview with the Sunday Express, Mr Davis - who quit a fortnight ago in protest at Mrs May's approach - predicted negotiations with the EU would remain deadlocked.
'We're going to have to do a reset and come back and look at it all again,' he said.
'I think when we get to the autumn, if we are in the situation where we don't have any degree of agreement, we're going to have to start again.'
Mr Davis urged ministers to draw up fresh proposals based on an amalgamation of the 'best bits' of deals the EU has already struck with other countries, such as Canada, South Korea, Switzerland and New Zealand.
But he said preparations for no deal need to accelerate from the current position of 'consult and cajole' to 'command and control'.
'By the end of the summer it should be plain we are making proper preparations for this,' he said.
In his interview, Mr Raab admitted he was still trying to persuade all members of the Cabinet that Theresa May's Chequers agreement was 'the best plan to get the best deal'.
He said: 'I want to make sure we can persuade everyone - grassroots, voters, parliamentary party and ministers, including in the Cabinet - that we've got the best deal and the best plan to get the best deal.'
The Brexit Secretary said critics were mistaken to think Mrs May would not walk away without a deal if she had to.
'They're wrong. No bluffing.
'The ball is now in the EU's court, and don't get me wrong, there will be plenty more negotiations, I've made that clear, but if they show us the same level of ambition, energy, pragmatism, this deal gets done in 12 weeks.'
The comments by Mr Raab on the divorce payment appear at odds with the views of Chancellor Philip Hammond, who said last December: 'I find it inconceivable that we as a nation would be walking away from an obligation that we recognised as an obligation.
'That is not a credible scenario. That is not the kind of country we are. Frankly, it would not make us a credible partner for future international agreements.'
A You Gov survey for The Sunday Times suggested only 16 per cent of voters think Mrs May is handling negotiations well, while 34 per cent believe former foreign secretary Boris Johnson would do a better job.
Just 11 per cent thought Mrs May's plans would be good for Britain, according to the research.
Some 38 per cent of people would vote for a new party on the right that was committed to Brexit, while 24 per cent are ready to support an explicitly far right anti-immigrant, anti-Islam party.
The poll found that one in three voters are prepared to back a new anti-Brexit centrist party.