Plans to break the current Brexit impasse could land Theresa May in even deeper trouble

BRUSSELS, BELGIUM - NOVEMBER 25:  British Prime Minister Theresa May speaks at a press conference after attending a special session of the European Council over Brexit on November 25, 2018 in Brussels, Belgium. 
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BRUSSELS, BELGIUM - NOVEMBER 25: British Prime Minister Theresa May speaks at a press conference after attending a special session of the European Council over Brexit on November 25, 2018 in Brussels, Belgium. 

Despite efforts by the Labour party and other political opponents of the government in the House of Commons, it now looks very unlikely that Theresa May — after last week's postponement — will put her Brexit proposal to a parliamentary vote this side of the New Year.

But there may still be plenty of public disagreements and political wrangling ahead when it comes to the best path forward, including inside her own Cabinet that meets Tuesday.

In her statement Monday, after a largely fruitless trip to Brussels late last week, the prime minister all but ruled out a second referendum on her watch. She insisted that such a vote would "break faith" with the British public, and in particular the slender majority that voted to leave the European Union more than two years ago.

Several of her ministers over the weekend dutifully echoed this view; International Trade Secretary Liam Fox said a second referendum would "perpetuate" the divisions in the U.K., while Education Minister Damian Hinds insisted it would unquestionably be "divisive."

So whither Brexit? And what clarity — if any — can investors and businesses glean from the current maelstrom of competing interests in Westminster?

One thing we know for certain after last week's failed leadership challenge is that May will remain in command of the Conservative Party unless she chooses to resign of her own accord. A failure to win a parliamentary majority for her hard-won Brexit deal could potentially trigger that kind of decision, but she has weathered plenty of other crises during her tenure so far.

What remains less clear is whether her decision to delay a meaningful vote on her Brexit deal until the second half of January is intended to give her time to actually win genuine concessions from her European counterparts on the Irish backstop; or if it is instead designed to force previously hostile MPs to vote with her government for an essentially unchanged Withdrawal Agreement, as a way to avoid an economically damaging no-deal. That would be a significant gamble given how close it would be to the March 29 deadline for Britain to exit the EU.

Recently though, even publicly loyal Cabinet colleagues like Fox and Hinds have acknowledged another possibility, a series of free and non-binding votes in Parliament known as indicative votes, that might provide a solution to the current impasse. These would help Downing Street sound out which Brexit approaches could theoretically command a majority, without legally committing May to a specific course of action or exposing her to an embarrassing Commons defeat.

Of course to pursue this route does carry with it a potential downside, at least from Number 10's perspective. May could face even greater public pressure to "break faith" in order to break the deadlock. For if a second referendum ends up as the most popular option among British lawmakers, that could result in an almighty New Year's hangover for the already embattled prime minister.