Boris Johnson has admitted that Brexit could lead to "meltdown" as he accused the Treasury of failing to seize the opportunities of leaving the European Union.
In incendiary comments, the Foreign Secretary said Chancellor Philip Hammond's department was the "heart of Remain" and conceded that there are "arguments" going on at the heart of the government over the best way for Britain to quit the bloc.
Johnson was secretly recorded speaking at a private dinner at the Institute of Directors in London, following a drinks reception hosted by the Thatcherite think tank Conservative Way Forward.
He said: "The fight at the moment, I won’t hide it from you, the inner struggle, is very, very difficult. The Treasury, which is basically the heart of Remain, has seized the risk - what they don’t want is friction at the borders. They don’t want any disruption. So they’re sacrificing all the medium and long-term gains amid fear of short-term disruption. Do you see what I’m saying?
"And that fear of short term disruption has become so huge in people’s minds that they’re turning them all wet. Project Fear is really working on them. They’re terrified of this nonsense. It’s all mumbo jumbo."
The foreign secretary added: "I’m not going to hide it from you, there is an argument going on."
Johnson said he was "increasingly admiring of Donald Trump" and added: "Imagine Trump doing Brexit. He’d go in bloody hard… There’d be all sorts of breakdowns, all sorts of chaos. Everyone would think he’d gone mad. But actually you might get somewhere. It’s a very, very good thought."
However, he insisted prime minister Theresa May was now ready to become more "combative with Brussels".
"You’ve got to face the fact there may now be a meltdown. OK," he said. "I don’t want anybody to panic during the meltdown. No panic. Pro bono publico, no bloody panic. It’s going to be all right in the end."
A friend of Boris said: “This was a private dinner under Chatham House rules so it is sad and very disappointing that it has been covertly recorded and distributed to the media.”