Leading Conservative Brexiteer, MP Jacob Rees-Mogg, has rejected claims that he and fellow Brexit supporters are threatening to bring down Theresa May's government in the ongoing disagreement over Britain's future trade relationship with Europe.

All European Union member states are currently part of a customs union, which means a common tariff is agreed on goods coming into the union from the outside, and that there are no taxes on goods transported between them.

With May insisting Britain will leave the customs union post-Brexit, one of the challenges facing the government is to agree on what arrangement should replace it.

The BBC reports that Chancellor Philip Hammond is believed to favor a partnership replicating the EU's existing arrangements at its own borders, collecting tariffs on behalf of Brussels, which would also have the advantage of helping resolve the Irish border problem, as there would be no hard border between the UK and the EU.

But ahead of a meeting of senior cabinet ministers on Wednesday to discuss the issue, the BBC reported it had seen a copy of a 30 page document put together by the European Research Group, known as the ERG, a pro-Brexit group of Conservative MPs led by Rees-Mogg.

The document says a customs partnership would make international trade deals "impossible" to secure, and demands that the suggestion be thrown out altogether.

Rees-Mogg has denied reports that the group has issued an ultimatum to May, but said the proposal for a customs partnership was "deeply unsatisfactory" and would "not get us out of the European Union, which is what people voted for".

Another prominent Brexiteer, former Conservative leader Iain Duncan Smith, was quoted by the Daily Telegraph newspaper as saying that the ERG report had killed the argument for the customs partnership "stone dead", while former Brexit minister David Jones told the BBC that "certainly there would be a lot of very disappointed Brexiteers if we were to end up in a customs partnership".

Rees-Mogg, 48, is widely regarded as a potential future leader of the Conservative Party, although two current Tory MPs have publicly stated they would leave the party if he took over.

Last year he had meetings with controversial US right wing political strategist Steve Bannon, who guided President Donald Trump to the White House, and this week Rees-Mogg wrote an article for the Times newspaper welcoming the prospect of Trump's summer visit to the UK, and the president's importance for Britain's political future post-Brexit.

"Once we have left our alliance with the EU, the United States will be even more central to our foreign policy than it currently is, especially as we are unlikely to be flavor of the month with the EU after our departure," he wrote.

"It is our national good fortune that the president with whom we will develop this new arrangement is Mr Trump. His election depended upon similar factors to those that led to Brexit.

"He appealed to voters left behind by the metropolitan elite and he exudes confidence about his own nation and a determination not to be a manager of decline, which also inspires the Brexiteers."