The expected demise of Theresa May’s Brexit plan has sparked open feuding over what comes next, with the chancellor, Philip Hammond, arguing that proponents of a no-deal Brexit are betraying the referendum result.

The cabinet will discuss on Tuesday the final details of what Downing Street calls a “new and improved deal” to be presented to the House of Commons, expected to include reassurances on areas including the Irish backstop, workers’ rights and environmental protections.

In an indication of the turmoil gripping the party, it emerged on Monday night that the former deputy prime minister Michael Heseltine has had the whip suspended after saying he would vote Liberal Democrat in Thursday’s European election.

With Conservative MPs near unanimous in saying May will lose the vote on her deal in the week starting 3 June, and Labour not minded to come to her rescue, attention is shifting to what happens when she leaves No 10, as she has promised to do soon afterwards.

Boris Johnson is the current clear favourite to succeed May but he will face intense opposition, especially if he opts to pursue a no-deal departure should negotiations with the EU on a revised Brexit plan founder.

Hammond is due to castigate proponents of leaving the EU with no deal in his most scathing terms yet when he speaks on Tuesday evening to the annual dinner of the CBI, which also vehemently opposes no deal.

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A no-deal Brexit was being touted by people “on the populist right”, Hammond is due to say, an apparent reference to Nigel Farage’s Brexit party which could also be read as criticism of Tory advocates of the idea.

He will add: “Let me remind them: the 2016 leave campaign was clear that we would leave with a deal. So to advocate for no deal is to hijack the result of the referendum and, in doing so, knowingly to inflict damage on our economy and our living standards.

“All the preparation in the world [could not avoid the consequences of no deal] so I will continue to fight, in the face of this polarisation, for a negotiated Brexit; an outcome that respects the British people’s decision to leave, while recognising that there is no mandate for a no-deal exit; and that we have an absolute obligation to protect Britain’s jobs, businesses and future prosperity.”

The comments come as any remaining political momentum seemed to ebb away from May’s Brexit plan, to be presented to MPs this time as the withdrawal agreement bill.

It had been touted by the prime minister as a “new, bold offer” and presented as a different entity to the Brexit plan now rejected by MPs three times.

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May’s spokesman said there were as yet no details on what offerings would be in the bill, saying it had yet to be completed. “We have been working on that piece of legislation for a long time, so the vast bulk of the work is completed, but there is still work ongoing,” he said.

However, he said it was likely to include ideas on workers’ rights and environmental measures explored in talks with Labour, and a commitment to alternative arrangements to try to ensure the Irish backstop was not needed.

Sent out on Monday morning to sell the plan via a series of media interviews, the health secretary, Matt Hancock, argued that MPs should back the bill in the initial vote and then seek to amend it.

“You need to vote for this legislation and then have the debate at the committee stages later on exactly what the details are,” he said. “And no doubt there will be votes on the really big issues like whether to have a people’s vote and whether to have customs union.”

However, this argument appeared to backfire, with the former Brexit secretary David Davis saying it meant he might now not vote for the deal, having backed it in the last two votes.

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“This is not a great new offer; it’s a great new concession,” Davis said. “What it will do – and this is the critical thing – is if we pass that act, it opens things up so that the successor to the prime minister, the next prime minister, will have their hands tied.”

In private, Conservative MPs said the bill had almost no chance of passing. “It’s doomed unless all Tory leadership contenders decide to support it so they don’t have to deal with it,” said one influential centrist backbencher.

Another MP used similar language: “It’s doomed and none of the concessions will persuade enough MPs to vote for it.”

A third MP said that, like Davis, they might not back the plan, having voted for it last time: “I’ll have to wait and see what it says, but there’s a good chance I won’t this time,” they said, adding that they could not risk the idea of a second referendum being added to the bill. They said: “The Brexit party are just killing us in my constituency. If there was an election tomorrow I’d be gone.”