Brexit: Parliament gets to decide between no deal and delay [UPDATED]

LONDON—British Prime Minister Theresa May bowed to intense political pressure Tuesday and handed control of Brexit to Parliament, telling lawmakers they will get to choose between leaving the European Union on schedule—with or without a divorce deal—and asking the EU to postpone departure day.

May said that if Parliament rejects her deal with the EU in a vote due by March 12, lawmakers would be given a vote the next day on whether to leave the bloc without a withdrawal agreement. If the no-deal option is defeated, as seems likely, they would get a vote on whether to ask the EU to delay Brexit by up to three months.

May said the promises were “commitments I am making as prime minister and I will stick by them.”

Britain is scheduled to leave the EU on March 29, but so far the government has not been able to win parliamentary approval of the agreement on withdrawal terms and future relations. Anxiety over the standoff is intensifying since a chaotic “no-deal” Brexit could cause disruptions for businesses and people in both Britain and the 27 remaining EU countries.

May shifted her position on giving lawmakers authority for Brexit after members of her government joined calls for her to rule out a “no-deal” departure. Pro-EU lawmakers planned to try to force the government to do that during a series of Brexit-related votes set for Wednesday.

Three government ministers wrote in Tuesday’s Daily Mail they planned to vote with opposition lawmakers to stop a no-deal withdrawal unless May agreed to delay Brexit and guarantee “we are not swept over the precipice on March 29.”

May said her goal remains to lead Britain out of the EU on schedule and with a deal.

“I don’t want to see an extension,” she said, adding that any delay to Brexit should be “as short as possible.”

Delaying Brexit would require approval from all 27 other EU countries. European Council President Donald Tusk said Monday the remaining members would “show maximum understanding and goodwill” to such a request.

But some EU leaders say Britain must have a good reason for seeking the pause rather than citing simple indecision as justification for a delay.

Philippe Lamberts, an influential member of the European Parliament’s Brexit steering group, said a British request for an extension must be accompanied by “a credible plan for holding a people’s vote on the final deal that includes an option to remain.”

May said she would never support a referendum that could overturn Britain’s 2016 decision to leave the EU.

Businesses warn that without a deal Britain risks a chaotic departure that could disrupt trade between the U.K. and the EU, its biggest trading partner. The uncertainty has already led many British firms to shift some operations abroad, stockpile goods or defer investment decisions.

Businesses and the markets breathed a sigh of relief at May’s statement, which did not rule out “no deal” but at least pushed it a bit further away. The pound rose above $1.32, its highest level for a month.

“Today, we have seen real movement towards ruling out a chaotic and damaging no-deal on March 29,” said Mike Cherry, national chairman of the Federation of Small Businesses.

But many lawmakers pointed out that British politics remains deadlocked over Brexit, with both May’s governing Conservatives and the main opposition Labour Party deeply split on the issue.

Pro-EU Conservative legislator Ken Clarke said delaying Brexit would not break the logjam, but only see the “present pantomime” continue, with “similar chaos about where we are going.”

The House of Commons rejected May’s deal with the EU last month—largely over concerns about a provision to guarantee an open border between the U.K.’s Northern Ireland and EU member Ireland—and sent May back to Brussels to get changes.

The EU is adamant that the legally binding withdrawal agreement can’t be changed, though the bloc’s negotiators are holding talks with U.K. Attorney General Geoffrey Cox about potential tweaks or additions around the margins.

The leader of the opposition Labour Party, Jeremy Corbyn, accused May of a “grotesquely reckless” bid to run down the clock in order to blackmail lawmakers into supporting her deal.

“Every delay, every bit of badly made fudge just intensifies the uncertainty for industry, business, investment being held back, jobs being lost and more jobs being putting at risk,” he said.

Labour, which has its own internal schism over Brexit, took a step Monday toward campaigning for a new EU membership referendum as a way to break the deadlock. The left-of-centre party said it would back a second public vote if the House of Commons rejects its alternative Brexit plan, which calls for Britain to retain close economic ties with the EU.

Corbyn said that if May’s deal was approved by Parliament, “we believe there must be a confirmatory public vote to see if people feel that’s what they voted for” in the 2016 EU membership referendum.

But the idea of a new referendum faces opposition from some Labour lawmakers in areas that voted to leave the bloc, who say reversing Brexit would betray the will of voters.

“We can’t ignore millions of Labour ‘leave’ voters,” said Labour lawmaker Caroline Flint.

—Danica Kirka in London and Raf Casert in Brussels contributed.