Boris Johnson has said he will press on “undaunted” with his Brexit strategy despite MPs backing the principle of a further delay to the process.
The PM vowed to introduce legislation needed to implement his “excellent” agreement in Parliament next week.
But he will have to ask the EU for an extension beyond 31 October after MPs backed a motion designed to rule out a no-deal exit by 322 votes to 306.
The EU said it was up to the UK to “inform it of the next steps”.
Ministers have signalled a vote on the PM’s revised Brexit agreement could now take place on Monday, depending on what the Speaker decides.
During the first Saturday parliamentary sitting for 37 years, MPs delivered a blow to the PM’s Brexit strategy.
They backed a motion, tabled by independent MP Sir Oliver Letwin, which “withholds approval” for Boris Johnson’s Brexit deal until legislation implementing it has been passed.
It was due to be followed by a vote on the main government motion – whether or not to back the deal.
The motion – amended because of the vote on Sir Oliver’s amendment – was approved without MPs going into the division lobbies.
A vote on a cross-party amendment on preventing a no-deal referendum and holding a second referendum was also dropped.
The defeat is a major setback for the PM, who has repeatedly insisted that the UK will leave at the end of the month come what may.
But Mr Johnson said he was not “daunted or dismayed” and he still believed the best thing for the UK was to leave the EU later this month on the basis of his “excellent deal”.
“I will not negotiate a delay with the EU and neither does the law compel me to do,” he said.
He said he did not believe the EU would be “attracted” by a further delay and his policy remained “unchanged”.
But Labour leader Jeremy Corbyn said the defeat represented an “emphatic” rejection of the PM’s strategy and he must now comply with the law in seeking a further extension.
The EU is not going to rush to take any action following this vote.
As far as it is concerned, it has negotiated a new Brexit deal as requested by the UK government and now it is up to that government to sell that deal.
There is zero appetite in the EU to renegotiate the deal and, if the EU receives a request for a new Brexit extension, don’t expect a rush on the EU’s side to grant it.
In order to approve or discuss a new extension all EU leaders would have to come back to Brussels, which they left less than 24 hours ago.
The EU Commission now waits to hear from Boris Johnson about what has changed because he promised them at the summit just 24 hours ago that the new Brexit deal would be voted on in Parliament, and approved by the majority of MPs.
If push comes to shove, I cannot see EU leaders saying no to another request for an extension if the alternative would be a no-deal Brexit, which they have wanted so much to avoid.
But that is now all to unfold in the days to come.
Sir Oliver Letwin said the move meant the UK would not “crash out” of the EU on 31 October without a deal if the necessary legislation was held up or derailed.
He insisted his aim was not to stop the UK leaving and he would vote for the enabling legislation when it comes forward.
His motion was supported by 10 former Tory MPs who have either quit or been forced out of the party over Brexit, including Philip Hammond, David Gauke and Amber Rudd.
However, six Labour MPs voted against the amendment, as did five former Labour MPs who now sit as independents, which the BBC’s Laura Kuenssberg said would give the PM hope of passing his agreement the next time around.
The Democratic Unionists, who backed the Letwin amendment, said the delay would allow for further scrutiny of the PM’s agreement – emphasising that its support would depend on preserving the “constitutional and economic” integrity of the UK.
But Brexiteers reacted with anger, Tory MP Peter Bone saying it had been “a complete waste of time”.
And the European Commission spokeswoman said it noted the vote.
Under the terms of the Benn Act passed last month, the PM is legally obliged to ask the EU for a further delay if Parliament has not approved an agreement by then.
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