THERESA May is to deliver a long-awaited speech setting out her vision for Britain's future relationship with the European Union next Friday Downing Street has said.

The announcement was made this morning after it emerged Eurosceptic ministers were said to have won an internal debate over what sort of Brexit the UK Government should pursue.

May gathered her deeply divided Cabinet at Chequers yesterday, where they attempted to come up with a unified position over the course of eight hours of tense discussion.

READ MORE: Someone is missing from this photo...and Nicola Sturgeon isn't happy about it

Reports this morning suggested that after the meeting broke up at 10pm, senior sources claimed that "divergence has won", meaning the UK will demand being able to severe itself from EU protections safeguards - such as the working time directive and paid annual leave - after the UK quits the bloc.

Hardline Brexiteers such as Foreign Secretary Boris Johnson and International Trade Secretary Liam Fox strongly support the UK from being able to diverge from EU regulations.

However, pro-Remain ministers, such as Chancellor Philip Hammond and Home Secretary Amber Rudd, had argued that the UK should stick as closely as possible to European laws to avoid causing unnecessary damage to the economy.

In a major compromise aimed at helping to smooth over Cabinet divisions, the meeting refused to put a precise timetable on when Britain would fully allow regulatory divergence.

Health Secretary Jeremy Hunt - who was not at the Chequers meeting - said the Government will pursue a policy putting Britain outside a customs union with the European Union but matching Brussels rules in certain sectors in an attempt to achieve "frictionless" trade.

The policy puts May on a collision course with Tory Remain rebels who are backing an amendment to the Trade Bill which would mandate the UK to form a customs union with Brussels on leaving the EU.

Labour leader Jeremy Corbyn is widely predicted to give his blessing to a customs union arrangement with the EU in his own speech on Monday, in which he is expected to give greater clarity on his party's Brexit policy.

Shadow foreign secretary Emily Thornberry said Labour now backs a customs union which would look "pretty much like" the current one after withdrawal.

Unlike previous keynote Brexit addresses in Florence and Munich, the Prime Minister's speech is expected to take place in the UK, though Downing Street refused to discuss the venue.

May is expected to speak to the Scottish Conservative conference in Aberdeen, which takes place on March 2-3, but it is understood she will not delivers her Brexit speech to the party conference.

Her official spokesman characterised the eight-hour Chequers meeting as "very positive ... and a step forward, agreeing the basis of the Prime Minister's speech on our future relationship".

The meeting's conclusions will be discussed at by the full Cabinet ahead of May's speech - probably at its regular Downing Street meeting on Tuesday.

Hunt said the Brexit sub-committee agreed that Britain must not be part of a customs union as it should have the right to strike free trade deals with other countries, and claimed "frictionless" trade was still possible without one.

He told BBC Radio 4's Today programme: "Customs union is one way of getting frictionless trade but it's not the only way, and what we're saying is we want to achieve frictionless trade by agreement between two sovereign bodies - the United Kingdom and European Union."

He added: "You have divergent views on a big issue like Brexit, as you would expect, but the central common understanding is that there will be areas and sectors of industry where we agree to align our regulations with European regulations. The automotive industry is perhaps an obvious example because of supply chains that are integrated.

"But it will be on a voluntary basis, we will as a sovereign power have the right to choose to diverge, and what we won't be doing is accepting changes in rules because the EU unilaterally chooses to make those changes."

Tory Remainer Anna Soubry, who has tabled the customs union amendment, said she has cross-party support and called on Labour to back it, tweeting: "It would be in the national interest if the Government & official Opposition also backed it."

Meanwhile, Downing Street dismissed reports that the PM was preparing for a U-turn on the rights of EU nationals who arrive in the UK during any transition period following the date of Brexit in March 2019.

Her official spokesman said there was no change in May's position that the rights of EU nationals arriving after the date of Brexit in March 2019 would be different from those coming to the UK before.

Jacob Rees-Mogg, who chairs the European Research Group of backbench Tory arch Eurosceptics, whose 62 members include four Scottish Tory MPs- Ross Thomson, Stephen Kerr, Alister Jack and Colin Clark, said it would be "unconscionable" for May to cave in to EU demands for permanent settlement rights for anyone arriving before the end of the transition period - probably 2021.

Rees-Mogg told Today: "I'd be astonished if Mrs May would make U-turn of that kind; she is a lady of great backbone and for her to kowtow to the European Union is I think unconscionable."