Conservative MPs have written to Theresa May calling on her to pursue a hard Brexit ahead of a crunch meeting of senior Cabinet ministers.
More than 60 MPs have written to the Prime Minister to set out their demands for the next stage of talks.
In the letter, Conservative MPs warned the UK must have full control over their laws after Brexit and must not become a "rule taker". They also also argue for "full regulatory autonomy" for Britain after Brexit.
The letter was sent by the European Research Group (ERG), which is made up of Tory Eurosceptics and chaired by Jacob Rees-Mogg, and was signed by 62 MPs, including former cabinet ministers Priti Patel and Iain Duncan Smith.
It states that Britain must not be stopped from negotiating and signing trade deals during any transition period and suggests "taking control" of World Trade Organisation tariff schedules that regulate trading.
"The UK must be free to start its own trade negotiations immediately," the letter adds.
"The UK should negotiate as an equal partner. Ministers may not want or be able to accept the EU's timing and mandates as fixed, and should be able to set out alternative terms including, for example, building an agreement based on our World Trade Organisation membership instead.
"Any 'implementation period' should be based on WTO principles. Any implementation period must not restrain the UK from negotiating or signing other trade agreements."
The letter is likely to pile pressure on Ms May to remain steadfast in her Brexit strategy ahead of a crunch meeting of her "Brexit war cabinet" at Chequers on Thursday.
The Prime Minister has ordered warring cabinet ministers to come together in an attempt to thrash out a shared position on the UK's future relationship with the EU. Two meetings of the committee earlier this month ended without an agreement.
Philip Hammond, the Chancellor, Amber Rudd, the Home Secretary, and Greg Clark, the Business Secretary, have all argued in favour of maintaining close regulatory alignment with Europe but Boris Johnson, the Foreign Secretary, Liam Fox, the International Trade Secretary, and Michael Gove, the Environment Secretary, want a clean break from EU regulations.
The ERG letter will be seen as an attempt to warn Ms May she will face Eurosceptics' wrath if she agrees to any compromise with her pro-EU cabinet ministers.
The demands provoked fury among other Tory MPs.
Nicky Morgan, the former Education Secretary who now chairs the Treasury Committee, said: “That isn’t a letter, it is a ransom note. The ERG clearly think they have the PM as their hostage.”
Labour said the letter exposed the "deep divisions" in the Conservative Party.
Paul Blomfield, shadow Brexit minister, said: "It is clearer than ever that Theresa May cannot deliver the Brexit deal Britain needs.
"She is too weak to face down the fanatics in her own party and to deliver a final deal that protects jobs and the economy."
Former Liberal Democrat leader Tim Farron, a supporter of the Best For Britain against Brexit, said: "It seems the Prime Minister has one arm tied behind her back by the Tory militants who are now nakedly acting like a party within a party.
"Not satisfied with hijacking the referendum result for their own extreme ends, now May's militants, now called Maymentum, are hijacking the Conservative Party - one nation, pro business, common sense Tories must fight back for the good of our country.
"And the PM must listen to the people, not to the far-right faction who are launching this shameless coup."
SNP foreign affairs spokesman Stephen Gethins said: "The process for leaving the EU has been hijacked by hard right Tories whose agenda for Brexit at any costs will be devastating for us all in terms of jobs, the economy and opportunities for young people in the future.
"It is clear from this list of demands that the Tories don't want either a transition deal or a future relationship with the EU. It is time for the Prime Minister to put country before party and say no to her hard right Brexiteers."
Press Association contributed to this report
