A Brexit vote in U.K. parliament has been delayed by Prime Minister Theresa May, following fears that the British government was headed for an embarrassing defeat.
The move was confirmed in a statement by May to lawmakers in the House of Commons on Monday afternoon.
The climb-down will be seen as a failure on the government's part to persuade enough lawmakers that the draft Brexit deal with Brussels is the best possible arrangement.
At the start of her statement, sterling was at 1.2640 versus the dollar.
One contentious element of May's deal is a clause in the withdrawal deal known colloquially as the "Irish backstop." This arrangement would ensure no hard border is erected between Northern Ireland and the Republic of Ireland, even if no formal Brexit deal can be reached.
It would mean Northern Ireland could stay in the customs union and select parts of the EU's single market, therefore continuing a friction-free border with the Republic of Ireland.
But lawmakers from different parties fear that without an agreed time limit, or a unilateral right by the the U.K to the end the clause, it could be used as leverage to keep the whole of the U.K. under EU rules until Brussels decides otherwise.
They have said they will continue to oppose May's draft deal with Brussels unless she can either remove the backstop or put a time limit on its effectiveness.
Some opponents to May's deal also want her to gain stronger commitments on the U.K.'s ability to strike a free trade agreement with the EU, release Britain from EU courts and stop payment of an agreed £39 billion "divorce bill."
On Monday morning an EU spokeswoman revived a quote from European Commission President Jean-Claude Juncker who has previously stated "We will not re-negotiate" on Brexit.
The now-delayed vote in the House of Commons is termed the "meaningful vote" and is to allow lawmakers to have their say on the terms of Brexit that the EU and British government had previously agreed.
May's motion that she seeks parliamentary backing for includes a "withdrawal deal" that outlines the divorce and a "future relationship" document that spells out the areas of negotiation that we needed to resolve how the EU and U.K. will interact in future.
May has claimed it is the best deal she could get to satisfy a deeply divided country which in June 2016 voted 52 percent to leave and 48 percent to remain in the EU.
But MPs from all sides of the British political spectrum have publicly refused to back the deal. Her deal with Europe is seen by some as a sell-out to the ideals of Brexit, reducing Britain's influence while staying within many of the EU's rules.
And many of those who oppose Brexit didn't like the deal either. They have argued that it will reduce Britain's ease of trade with the world, repel global talent, and increase the cost of living.
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