It came as senior Brussels official Donald Tusk called for the process to be as painless as possible for the EU but revealed the other 27 member states will not agree their joint talks position until a month after Theresa May triggers the formal Brexit process.
Brexit-backing Cabinet ministers are said to fear that Remain-voting Chancellor Mr Hammond is not up to resisting expected demands from Brussels for as much as £50billion to cover the UK’s ongoing financial liabilities in the EU.
One source said Mr Hammond was among ministers believing the UK would have to pay a “huge” sum to get out – but that anything more than £2 or £3billion was “not possible”.
Allies of the Chancellor hit back, saying he “did not recognise” claims the EU wants up to £50billion in exit fees.
They also pointed to his recent comments accusing Brussels of “overstating” its position.
Theresa May’s official spokesman declined to comment on whether the PM backed a bill ceiling, saying: “This is the beginning of the negotiations. Let’s see how it works out.”
This is the beginning of the negotiations. Let’s see how it works out
The financial issue is likely to be one of the first addressed when formal talks with Brussels begin.
Her letter formally notifying the EU of Britain’s intention to leave following last June’s referendum will be delivered to Mr Tusk, who is president of the European Council of EU member state governments.
He has promised to outline a draft response within 48 hours and today announced April 29 as the date for a summit of the other 27 EU leaders to agree a joint Brexit negotiating position.
The leaders are said to be frustrated that Mrs May decided not to notify until next week – close to her self-imposed March 31 deadline – despite getting clearance last week when key legislation got royal assent.
They had pencilled in April 6 for a meeting to agree their position with a view to starting substantive talks later that month.
Announcing the summit date, Mr Tusk added: “As you all know, I personally wish the UK hadn’t chosen to leave the EU but the majority of British voters decided otherwise.
“Therefore, we must do everything we can to make the process of divorce the least painful for the EU.
“Our main priority for the negotiations must be to create as much certainty and clarity as possible for all citizens, companies and member states that will be negatively affected by Brexit, as well as our important partners and friends around the world.”
The process lasts up to two years from the day Article 50 is invoked but talks are expected to have to wrap up as early as October 2018 to give the European Parliament time to consider any deal in time for Britain to leave the bloc in March 2019.
The UK Cabinet will meet next Wednesday – instead of the usual Tuesday – to consider the letter, and Mrs May will make a special statement in the Commons after her regular weekly Prime Minister’s Questions, her spokesman said.
At today’s Cabinet meeting Mrs May told ministers that invoking Article 50 would be “a historic event” for Britain opening “a bold new chapter as a prosperous, open and global nation”, said her official spokesman.
Her letter to Mr Tusk would be “one of the most important documents in out country’s recent history and will start to deliver the result of the referendum and set the tone for our new relationship with Europe and the world”.
Mrs May stressed her resolve to get an early agreement on the rights of EU citizens living in the UK and British ex-pats on the Continent, and her expectation that Brexit as a whole would be “smooth and orderly, giving certainty to individuals and businesses and allowing us to make preparations that will see an independent UK prospering outside the EU”.
In a pointed reference to Scottish First Minister Nicola Sturgeon’s threat of another independence referendum in the light Brexit, the PM added that the work of the Cabinet’s EU exit and trade committee had “provided a strong platform from which we can now prepare to enter negotiations to secure a deal for the whole of the UK”.
A White Paper is expected shortly setting out Government proposals ahead of the planned Great Repeal Bill by which the UK will transfer EU law into British statue so that the Westminster Parliament can decide which regulations to keep, amend or scrap at its leisure after Brexit.