MPs have inflicted another Brexit defeat on the government in Parliament by backing measures designed to thwart preparations for a no-deal exit.
They backed an amendment to the Finance Bill, which would limit spending on no-deal preparations unless authorised by Parliament, by 303 to 296 votes.
Jeremy Corbyn urged Theresa May to now rule out no deal “once and for all”.
Treasury minister Robert Jenrick said the “simple truth” was the UK would leave the EU on 29 March.
He said no-deal planning was “prudent preparation to provide our taxpayers with the certainty they deserve” and all the defeat would do would be to make the UK “somewhat less prepared”.
Twenty Conservative MPs rebelled against the government, including former cabinet ministers Michael Fallon, Justine Greening, Dominic Grieve, Ken Clarke and Oliver Letwin.
Mr Grieve said it was a “perfectly sensible” step given that he believed a no-deal exit presented the gravest peacetime threat to the UK in 70 years.
Mr Corbyn hailed the development as an “important step” to prevent a no-deal Brexit.
The Labour leader tweeted: “It shows that there is no majority in Parliament, the Cabinet or the country for crashing out of the EU without an agreement.”
The setback for the government comes as MPs prepare to resume debate on Wednesday on Theresa May’s proposed Brexit deal, culminating in a vote next week.
It also comes at the end of a day in which senior ministers spoke out about the risks of exiting the EU without any agreement on the terms of withdrawal.
Work and Pensions Secretary Amber Rudd told the cabinet that the public would take a “dim view” of government if it settled for a disorderly Brexit and suggested it would make the UK less safe.
And Business Secretary Greg Clark said such an outcome “could not be contemplated”.
The Commons amendment, tabled by Labour’s Yvette Cooper, is designed to limit the Treasury’s ability to spend money implementing a no-deal exit, including raising certain taxes, without the explicit consent of Parliament.
The technical changes to a crucial piece of government legislation were intended to demonstrate to ministers the strength of opposition to a no-deal Brexit in the Commons.
Ms Cooper said although it would not block a no-deal exit, it “set a precedent” and showed MPs would not allow the UK “to just drift into it by accident”.
Labour MP Ian Murray, who backs the People’s Vote campaign for another referendum, said it showed that a no-deal exit was an “empty threat”.
“The real choice facing Parliament and the country is now clear,” he said.
“We can leave the EU under the terms of some version of the prime minister’s bad deal or we can keep all our rights, powers, influence and op-outs in our current deal as full members of the EU.”
Many Tory Brexiteers believe a no-deal exit, which would see the UK trade with the EU on the basis of World Trade Organization rules, is nothing to be feared.
Former Tory leader Iain Duncan Smith said “scare stories” that it would lead to planes being grounded and ports being gridlocked must be put to bed.
Tuesday’s vote, he told Sky News, did not alter the fact that MPs had already passed legislation last year specifying that the UK would leave on 29 March.
“We have legislated to leave the EU, with or without a deal… That is what people voted for.”