Britain's parliament on Tuesday resoundingly rejected Prime Minister Theresa May's Brexit deal, triggering a no-confidence vote in her government and plunging its plans to leave the E.U. into further chaos.
M.P.s voted 432 to 202 against May's plan for taking Britain out of the European Union, the biggest parliamentary defeat for a government in modern British political history. With a deal that took nearly two years to craft in tatters and her government's future hanging in the balance, E.U. leaders sounded a note of exasperation, urging Britain to come out and say what it actually wants.
"If a deal is impossible, and no one wants no deal, then who will finally have the courage to say what the only positive solution is?" E.U. President Donald Tusk tweeted.
Most lawmakers have always opposed Brexit, as have some leading members of the government, creating a contradiction that has been tearing apart Britain ever since a June 2016 referendum began its divorce from the other 27 E.U. states.
Moments after Tuesday's outcome, which was met with huge cheers by hundreds of anti-Brexit campaigners who watched the vote on big screens, opposition Labour leader Jeremy Corbyn submitted a motion of no-confidence in May's government, calling her defeat "catastrophic." The vote is expected on Wednesday at 7 p.m. GMT.
Downing Street said May would then return to parliament with a new Brexit proposal on Monday. With their nation again in turmoil, noisy supporters and opponents of Brexit, rallied outside the ancient parliament building in London.
"It could end up being the day that will lead to us leaving with no deal!" said 25-year-old Simon Fisher, who backs a swift and sharp break with the E.U. A much larger rally nearby in support of a second referendum turned Parliament Square, dotted with statues of past U.K. leaders, into a sea of E.U. flags.
Economists said the scale of May's defeat—on the upper end of most predictions—now also put pressure on Brussels to make more meaningful compromises. The pound surged higher against the dollar and euro after the vote, seemingly buoyed by May's promise to seek a compromise with her opponents. "Markets project beliefs and the underlying belief is that nobody's going to be committing economic suicide," BK Asset Management's Boris Schlossberg said. But businesses voiced alarm about the outcome, which does nothing to resolve uncertainty that has been dampening the U.K. investment climate for months. "Financial stability must not be jeopardized in a game of high-stakes political poker," warned Catherine McGuinness, policy chair at the City of London Corporation, the body governing the British capital's massive financial district.
May made it her mission to carry out the wishes of voters after she became prime minister a month after the referendum, putting aside her own initial misgivings and stating repeatedly that "Brexit means Brexit." But her deal raised concern that Britain could end up locked in an unfavorable trading relationship with the E.U. Criticism of the deal was focused on an arrangement to keep open the border with Ireland by aligning Britain with some E.U. trade rules, if and until London and Brussels sign a new economic partnership—a tortuous process that could take several years.
Speculation is growing on both sides of the Channel that May could ask to delay Britain's divorce from the E.U. after almost half a century of membership. But a diplomatic source said any extension would not be possible beyond Jun. 30, when the new European Parliament will be formed.