It comes as Boris Johnson and David Davis urge the Prime Minister to open trade talks with the US to break deadlock in Brussels in a major intervention just days before the Tory conference.
They back a new report that argues for a looser arrangement with the EU like Canada has – as well as opening simultaneous trade talks with America and India to heap pressure on Brussels to negotiate properly.
Mr Raab risked infuriating No10 by suggesting he was “always listening to new proposals and new ideas” ahead publication of the alternative blueprint.
The hint came despite Mrs May insisting she would be sticking to her soft Brexit plan to keep Britain tied to Brussels rules drawn up in July at her country house.
Mr Davis and Jacob Rees-Mogg will join Labour figures to launch the new plan, with Boris Johnson also backing its findings.
Allies of the former foreign secretary said supported the calls but could not attend the report’s Westminster launch. It calls for trade talks to be opened with other countries around the world now to strengthen Britain’s negotiating hand in Brussels.
And it claims a hard border in Northern Ireland can be avoided with paperwork and a special security exemption from the World Trade Organization to protect the Good Friday Agreement.
The report is the brainchild of trade expert Shanker Singham of the Institute of Economic Affairs – and warns time is running out for the UK to make the most of Brexit.
Taking aim the PM’s controversial plan, a source familiar with the report said “Chequers is a damage limitation exercise that would see Britain give up the Brexit prize.”
They added: “Independent trade and regulatory policy is the prize. If the rest of the world sees us as just a little Europe, then why would they have any interest in doing good deals?”
And they will cite legal advice that claims Brussels is wrong to say Britain cannot conduct trade talks with other countries at the moment.
Dominic Raab appeared to welcome its publication when asked about alternatives to Chequers.
But he warned the EU would have to shift their position on “carving up the UK” for a Canada trade deal to work.
Mr Raab said it is “off the table in the terms that the EU would even plausibly accept”, but he urged Brussels to be more flexible to find a deal that works.
He added: "If we just get this sort of 'computer says no' response from the EU we are not going to make progress.”
THE SUN SAYS: ELECTION FOLLY
Rumours of a snap election in November, just four months before we leave the EU, are deeply concerning.
Not only does it give the impression of a Government in chaos, it would cost Britain valuable negotiating time.
Decision time is quickly approaching for Theresa May.
“Brexit means Brexit” will soon need flesh added to the bones: the Chequers compromise or the more ambitious — but more difficult to deliver — model presented by free traders today.
And far from pondering her domestic strength, she should focus on flexing her muscles with Brussels.
Above all, it means reminding that unconvincing Napoleon tribute act Emmanuel Macron and the tight-fisted Angela Merkel that we’re perfectly happy to break free without paying a penny of our £39billion “exit deal”.
They must know that asking their own increasingly Eurosceptic voters to fill the hole left by our departure could bring down the whole house of cards.
And keeping that cash here would pay for plenty of tax cuts, making the UK even more competitive on a global stage.
It’s time to get tough. Deal, or no dough.
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