The Daily Express has learnt from senior Tory sources that that senior ministers are getting increasingly angry with the Chancellor with some questioning why the Prime Minister does not accept his resignation threat.
Last week one senior minister lashed out in a private message saying that it is “the Treasury that is the block” in reference to concerns that Mr Hammond is getting in the way of getting on with trade deals and tackling immigration.
He has already reportedly vetoed an attempt to set up a skilled work permit system for EU citizens and is also, according to sources, lobbying for Britain to stay in the Single Market.
A spokeswoman for the Prime Minister denied he has threatened to quit twice and insisted Mrs May has “full confidence” in Mr Hammond.
However, both Downing street and Health Secretary Jeremy Hunt admitted that there are “strong differences” over Brexit in the Cabinet amid a “Remoaner” rearguard action to stop Mrs May go through with her plans to deliver Brexit, end payments to the EU, take control of British laws and end free movement of people.
A senior Tory figure told the Daily Express: “Hammond is one of the blocks. There is no doubt about that.
“Really he needs to go or accept we are leaving the EU. Otherwise you have to wonder why the Prime Minister is keeping him.”
Despite the row a spokeswoman for the Prime Minister insisted that Mrs May has “full confidence” in Mr Hammond.
Downing Street yesterday admitted there were “differing views” about Brexit around the Cabinet table but insisted the Chancellor had the Prime Minister”s “full confidence”.
The Prime Minister”s spokeswoman said Mrs May was “pursuing a collective government” where “Cabinet ministers are able to discuss and debate the issues.”
The spokeswoman added: “It means hearing the differing views of ministers, departments and stakeholders.
“Ultimately, we need to make sure we are all working together to make a success of Brexit.”
Asked if Mrs May still backed Mr Hammond, the spokeswoman said: “The Prime Minister has full confidence in the Chancellor and the work he is doing.”
Earlier Mr Hunt, another senior Remain supporter left in the Cabinet, also acknowledged there had been “lively” discussions among ministers but played down suggestions Mr Hammond had been the victim of a briefing war by colleagues.
“If we weren”t having lively debates in Cabinet you would be saying “What”s happened to Cabinet government? Why aren”t you going through, incredibly thoroughly, all the different arguments to make sure that we end up with the right decision?”” he told the BBC Radio 4 Today programme.
“You would expect lively debates to be happening in Government. Because we are going to get the right solution in terms of securing our borders, but also the right solution economically.
“The British people changed the history of our country on June 23 and the Cabinet is absolutely united that we must respect that decision.
“But we need then to go through, very thoroughly and carefully, all the different options, because we have got to have a new immigration policy, a new trade policy, a new economic policy.”
However, it is understood that Trade secretary Liam Fox and Brexit Secretary David Davis are getting increasingly annoyed with Mr Hammond”s interventions.
In return Mr Hammond has been angered by a decision to leave him out of a lot of key meetings in Government on Brexit.
Last week a document was leaked from the Treasury rehashing Project Fear from the Referendum campaign suggesting that Britain would lose more than £60 billion with a so called “hard” Brexit.
The pressure on Mrs May to allow her “Remoaner” Chancellor to leave the Government appeared to be confirmed today by allies of Mr Hammond.
A source close to the Chancellor said: ““The Brexiters are trying to isolate Philip.”