Downing Street has clarified that it would ask parliament to support using powers to override parts of the Brexit withdrawal agreement only if the EU undermines the “fundamental purpose” of the Northern Ireland protocol. Boris Johnson brokered a deal with Conservative rebels on Wednesday to see off a potential party revolt, agreeing to grant MPs a vote before invoking powers in the UK internal market bill that would break international law by breaching the EU withdrawal agreement. In a fresh concession to rebels, No 10 published a policy paper on Thursday setting out the circumstances in which it would use the powers, as well as confirming that the government would also seek to use the dispute resolution mechanisms in the withdrawal agreement at the same time. The government’s deal with backbenchers, a group of whom were supporting senior Tory MP Sir Bob Neill’s amendment to give parliament a veto over use of the measures in the bill, came on Wednesday hours after the resignation of Lord Keen, the UK government’s law officer for Scotland. In its policy paper on Thursday, the government explained that it will ask parliament to support the provisions in the relevant clauses “only in the case of, in our view, the EU being engaged in a material breach of its duties of good faith or other obligations, and thereby undermining the fundamental purpose of the Northern Ireland protocol”. Under the Northern Ireland protocol, Northern Ireland would continue to enforce EU customs and follow product standards rules to prevent a hard border on the island of Ireland. No 10 also confirmed that “in parallel with the use of these provisions, it would always activate appropriate formal dispute settlement mechanisms with the aim of finding a solution through this route”. Examples of behaviour prompting the use of the measures included in the internal market bill would include, the government said on Thursday, the EU refusing to grant third-country listing to UK agricultural goods for “manifestly unreasonable or poorly justified reasons”. Other examples listed include an insistence that GB–NI tariffs and related provision should be “charged in ways that are not related to the real risk of goods entering the EU single market”, as well as an insistence on export declarations for NI goods going to GB. The former Tory leader Lord Howard, who backed Brexit but has been an outspoken critic of the government’s bill, said the compromise “isn’t enough” for him to back it in the Lords. “The government is still asking Parliament to break international law,” he told the BBC on Thursday. Even with the changes, he described the chances of the bill being approved by the Lords as “not great”. He added: “I don’t know what my colleagues will do, but as far as I’m concerned this is a matter of principle.” While some EU diplomats saw the government’s move to compromise with rebels as “promising”, senior EU officials insisted that the contentious clauses in the internal market bill remained a breach of the withdrawal agreement. “It may convince the Commons, but not the EU,” said a senior European diplomatic source who said Brussels would scrutinise the legal text as it emerged. “It is still a violation of the withdrawal agreement, but is an interesting development all the same.” A second senior EU official said the UK was still seeking to negotiate “with a gun on the table – albeit not cocked”. Brussels is now viewing the last week of September and the first two weeks of October, before an EU leaders’ summit on 15 October, as “very crucial” to the outcome of the trade and security negotiations. One senior diplomat said the EU had been “distressed and appalled” by the UK’s attempt to unilaterally rewrite the withdrawal agreement, but added that the bloc was determined to continue the talks. “Because it’s two separate tracks: one is the withdrawal agreement which the UK has decided to violate, and the next is going to be the future relationship,” said the diplomat. The EU is examining two main options: taking the UK to the European court of Justice or continuing the negotiations and then presenting the British government with the choice of dropping the relevant clauses of the internal market bill in order to secure a trade deal or leaving without an agreement. “It is up to the UK now,” said an official. The bill passed its second reading in the Commons on Monday evening by a majority of 77 despite a group of Tory MPs abstaining. A joint statement issued on behalf of Neill, Damian Green MP, chairman of the One Nation caucus, and 10 Downing Street on Wednesday evening said the government had agreed to table an amendment to the internal market bill at committee stage. Writing in the Telegraph last weekend, Johnson claimed that he had been anxious in recent weeks as negotiators believed there was a “serious misunderstanding” about the terms of the withdrawal agreement. “We are now hearing that, unless we agree to the EU’s terms, the EU will use an extreme interpretation of the Northern Ireland protocol to impose a full-scale trade border down the Irish Sea,” he wrote.