David Davis has delivered a heavy blow to Theresa May’s authority by resigning as Brexit secretary, warning that he will fight any move by the prime minister to make further concessions to Brussels.

Dominic Raab, a Brexit supporter who was previously a minister for housing and planning in the Home Office, has been appointed as his replacement.

Mr Davis followed his late night resignation by claiming that Mrs May had sold out to Brussels with her new “soft Brexit” strategy agreed at Chequers last week. “We have given too much away, too easily,” he said.

The former minister said he hoped his resignation would prove to Mrs May that her party would not tolerate any further dilution of her Brexit plan. Speaking on the BBC’s Today programme, he declared: “No further.”

Mrs May’s authority and her Brexit plan now hang in the balance. Downing Street hopes that the resignation of Mr Davis and Steve Baker, a junior minister, will be the end of the drama.

Her effort to hold onto other Brexit hardliners was evident in the appointment of Mr Raab, a prominent Leave campaigner during the 2016 EU referendum and co-founded Change Britain, an advocacy group that evolved out of Vote Leave. The group warned Mrs May last year that Britain should not be “kept in the EU by stealth”.

Mr Davis insisted he was not urging fellow ministers to resign and that Mrs May was “a good prime minister”, but Downing Street is on alert for any signs of the start of a concerted push to destabilise her.

Mr Davis was among the Eurosceptic ministers who endorsed the new Brexit plan at Chequers but he said that at the weekend he concluded he could not sell it to either parliament or other EU capitals.

“It was known I had concerns about it,” he said. “I had to do something I didn’t believe in and didn’t think that would work.”

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Mr Davis said that Mrs May’s plan to follow EU rules for goods created an “illusory” sovereignty and that her new customs plan will not fly in Brussels. He said he now feared the EU would come back for more concessions.

Tory MPs suspect that the prime minister will soon be asked to climb down on issues including free movement of people and EU budget contributions; Mr Davis and Mr Baker will be dangerous foes on the backbenches.

Mrs May had increasingly sidelined Mr Davis in recent months, keeping him in the dark until the last moment about the new strategy that she intended to present to the cabinet at Chequers.

When Mr Davis saw the complex new customs plan drawn up by Mrs May’s top Brexit official, Olly Robbins, he warned the prime minister that it would not fly in Brussels but was overruled. It was the final humiliation for the 69-year-old minister, who had been charged with overseeing Brexit since 2016 but whose role was gradually being taken by Mr Robbins.

In a robust resignation letter, Mr Davis claimed Mrs May was on course to dilute or abandon her promise to leave the single market and customs union, saying “the current trend of policy and tactics is making that look less and less likely”.

“In my view the inevitable consequence of the proposed policies will be to make the supposed control by Parliament illusory rather than real,” he wrote, adding that his concerns had been repeatedly overruled by Mrs May.

“As I said at Cabinet, the ‘common rule book’ policy hands control of large swaths of our economy to the EU and is certainly not returning control of our laws in any real sense,” he said in the letter, released in the early hours of Monday.

Mr Davis also articulated the fears of many Tory Eurosceptics that the Chequers accord was only the start of a series of climbdowns: “I am also unpersuaded that our negotiating approach will not just lead to further demands for concessions.”

Downing Street had feared that either Mr Davis or foreign secretary Boris Johnson might quit the cabinet in protest at the plan; in the event Mr Johnson decided not to quit even though he described the new plan as “a turd” at the Chequers meeting.

The pound remained higher after news of Mr Davis’ resignation, having risen after the terms of the Chequers accord on Brexit emerged. Sterling was up 0.6 per cent at $1.3354 on Monday morning. Against the euro, the pound was 0.3 per cent stronger, with £0.8816 required for a unit of the shared currency. 

Number 10 is braced for the possibility that other pro-Brexit ministers will follow Mr Davis out of the door, possibly triggering a Tory uprising against a plan seen by some Tory MPs as “Brexit in name only”.

Andrea Jenkyns became the first Tory MP to say that Mr Davis’s resignation should trigger the removal of Mrs May: “The time has come that we need a Brexiter prime minister . . . someone who believes in Brexit . . . Theresa May’s premiership is over.” 

Ian Lavery, chair of the Labour party, said: “This is absolute chaos and Theresa May has no authority left.

“The prime minister is in office but not in power. She cannot deliver Brexit and our country is at a complete standstill, while the Tories indulge in their leadership tussling.”

In a letter replying to Mr Davis, Mrs May said: “I am sorry that you have chosen to leave the government when we have already made so much progress towards delivering a smooth and successful Brexit, and when we are only eight months from the date set in law when the United Kingdom will leave the European Union.”

Mr Davis’s dwindling role in the Brexit process has become obvious in recent months. The Financial Times reported last month that he had held only four hours of talks with Michel Barnier, his EU opposite number, in the whole of 2018.

He threatened to resign last month when Mrs May forced through a “backstop” plan for the Irish border which committed Britain to open-ended ties to the customs union if all other plans failed.

Mr Davis’s team has speculated in recent weeks that the minister might quit and that Mrs May might put his old Department for Exiting the EU under the control of the centre. One theory was that David Lidington, Cabinet Office minister and a highly respected former Europe minister, could be put in charge.

David Davis's resignation letter

Read the annotated letter and Mrs May’s response.

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UK government in disarray as Davis resigns as Brexit secretary