Both Theresa May and Jeremy Corbyn have been handed a stunning defeat over Brexit after the Lords voted to keep membership of the single market on the table. Labour peers were whipped to abstain on the amendment concerning the European economic area. But 83 defied the whip, including a former party leader, many former ministers and a former chief whip. They were joined by 17 Conservatives.

The amendment on remaining in the European economic area (EEA) will now have to be considered and voted on by MPs when the bill returns to the Commons, perhaps as soon as next week. The Tories are likely to try to brand Labour as the party of free movement, which is one of the obligations of EEA membership. But the Labour MP Chuka Umunna said: “The time for constructive ambiguity is over – our members and our voters will be delighted with this clear signal that we will not go along with this Tory Brexit.”

There was some good news for Theresa May. Anna Soubry and Dominic Grieve, two key remainers, have signalled they might support the PM’s idea of a “customs partnership” with the EU. Soubry said: “If it delivers the huge benefit of our membership of the customs union and indeed the single market … then I don’t care what you call it.”

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