It is claimed by a leaked document that Brexit will leave Britain worse off under every single scenario projected by the government.
The analysis, prepared for the Department for Exiting the EU (DexEU), concluded growth would be lower under a series of potential scenarios.
Theresa May hopes – it estimates that growth will be down 5% over the next 15 years which would rise to 8% if Britain left without a deal and was forced to fall back on World Trade Organisation (WTO) rules.
The document warned that London’s position as a major financial centre could also be severely eroded, with the position under a free trade agreement not very different to operating under WTO rules.
On the positive side, it calculates a free trade deal with the United States could add 0.2% to growth while agreements with other countries such as China, India, Australia and the Gulf states, could together add another further 0.1% to 0.4%.
Alternatively, if the UK were to retain access to the single market through membership of the European Economic Area the loss would be just 2%.
The leaked findings are likely to infuriate pro-Brexit Tory MPs who already suspect the Government is heading for a “soft” break which will retain many of the existing elements of the relationship with Brussels.
A Government spokesman said: “We have already set out that the Government is undertaking a wide range of ongoing analysis in support of our EU exit negotiations and preparations.
“We have been clear that we are not prepared to provide a running commentary on any aspect of this ongoing internal work and that ministers have a duty not to publish anything that could risk exposing our negotiation position.”
A Government source added: “As part of its preparations for leaving the European Union, officials from across Whitehall are undertaking a wide range of ongoing analysis.
“An early draft of this next stage of analysis has looked at different off-the-shelf arrangements that currently exist as well as other external estimates.
“It does not, however, set out or measure the details of our desired outcome – a new deep and special partnership with the EU – or predict the conclusions of the negotiations.
“It also contains a significant number of caveats and is hugely dependant on a wide range of assumptions which demonstrate that significantly more work needs to be carried out to make use of this analysis and draw out conclusions.”
Brexiteer former Tory leader Iain Duncan Smith told the BBC: “I think the timing on this is highly suspicious.
“Almost every single forecast coming from government and most of the international organisations has been completely wrong.”