'The FTA would only apply to the Great Britain-EU relationship, with Northern Ireland effectively remaining in parts of the single market and customs union, ' he said.
Criticism of the prime minister's Chequers strategy from key Eurosceptics has ramped up in recent days, with former Brexit secretary David Davis and chairman of the ERG Jacob Rees-Mogg both backing a proposal put forward by the Institute of Economic Affairs based on the EU-Canada trade agreement.
The Sun newspaper later quoted a Downing Street official decrying the Times article as "utter hogwash".
Speaking to reporters as she flew to NY for the United Nations General Assembly, Mrs May said: "First of all, I have always said no deal is better than a bad deal".
Earlier on Tuesday, Labour said it was likely to oppose any deal negotiated by Theresa May as it did not meet its six tests, lessening the chances of it getting through Parliament.
Mrs May's spokesman also dismissed the Brexiteers" plan, adding: "The PM has repeatedly set out that we must protect the economic and constitutional integrity of the United Kingdom as a whole'.
"We keep on negotiating in good faith, we try and get the best deal we can, but we are ready for all eventualities", Raab told TalkRadio.
The Telegraph said while the majority of Labour members backed a people's vote, senior figures in the party figures have taken opposing views over what it should look like.
"The vast majority, the silent majority in this country just want us to get on with it and that's what we're doing".
Asked if she wanted an apology, she replied: "What I welcome is the fact we have seen Donald Tusk following our response, we have seen Donald Tusk actually clarify the position that they were taking and make it clear that actually the European Union side does want to look at a deal".
As ministers gathered at 10 Downing Street on Monday, the prime minister said she remained confident of securing a withdrawal agreement with the European Union, but the government would continue to plan for the possibility of no deal.
The prime minister also secured cabinet agreement yesterday for a new immigration system after Brexit despite objections from Philip Hammond, the chancellor, on how the change should be managed.
The PM said: "I have been very clear that one of the things that's non-negotiable is an end to free movement and that is absolute".
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