Theresa May has still not secured a deal with the Democratic Unionist Party to allow her Government to survive a Commons vote, a day before the Prime Minister sets out her legislative measures in the Queen's Speech.
Talks aimed at propping up Mrs May's minority Government - after a disastrous General Election showing saw the Tories lose their parliamentary majority - are "ongoing", according to Downing Street sources who insisted the PM had never set a timeline on the negotiations.
The uncertainty surrounding the Prime Minister's grip on power continued as Philip Hammond was set to deliver a keynote Mansion House address on the economy and Brexit on Tuesday.
Postponed from last week due to the Grenfell Tower tragedy, the speech had originally been billed as an attempt by the Chancellor to reassure business leaders that they would still have access to funding from the European Investment Bank (EIB) after Brexit.
The intervention comes after Brexit Secretary David Davis was seen to have been dealt a blow in the opening day of withdrawal negotiations with the EU, after it was agreed trade deal talks would not begin until October at the earliest.
Mr Davis had been hoping for parallel trade discussions alongside negotiations on the divorce settlement with the EU.
Shadow Brexit secretary Sir Keir Starmer said the talks had begun badly because Mrs May lacked authority and a mandate.
He told BBC Newsnight: "We have got off to the worst possible start because the Prime Minister called an election that she didn't need to call. It's not clear what her mandate is, and she has lost authority abroad."
Sir Keir said he was in favour of allowing free movement of labour from the EU if migrants had a job offer, saying: "I am attracted to that. We would have to work out what that looked like.
"I think we could strike a model that deals with people who want to come to work. We don't want arbitrary caps on migration that would crash the economy."
Amid reports that opposition parties will try to bring down Mrs May with a series of targeted amendments to the Queen's Speech, the PM said she was still pushing for an alignment with the DUP.
After talks with Irish premier Leo Varadkar, Mrs May insisted any deal with the DUP would not damage the Northern Irish peace process.
"We continue our discussions with the DUP. We are talking about a confidence and supply agreement with them. On reaching such an agreement we will make sure that the details of that are made public so that people can see exactly what that is based on.
"As a UK Government we remain absolutely steadfast in our commitment to the Belfast Agreement (and) its successor agreements."
The remarks came after warnings by the nationalist Sinn Fein and SDLP and the cross-community Alliance Party that a deal with the DUP would undermine the Government's attempts to restore the powersharing executive at Stormont.
Additional reporting by Press Association.
