Eurosceptic Tories have said Boris Johnson must “hold firm” to his commitment to no deal, suggesting Brussels was finally taking the UK’s intention to walk away from talks seriously. After reports over the weekend that the chances of a no-deal Brexit had risen to 80%, EU leaders announced that talks would resume past the given deadline of Sunday as both sides agreed to “go the extra mile” to secure a deal. Former cabinet minister Iain Duncan Smith said he expected talks would go to the wire and that Brexiteers may even be able to accept a short extension to allow the EU to ratify any deal forged before 31 December – but added that Johnson should still be prepared to walk away if talks came to a standstill. “He has made his bed and he has to lie in it. Now he has said this deal is unacceptable and we have to be prepared to go for WTO terms, then he has nowhere to go. Now the European Union are the ones who have the flexibility and they must move if they want a deal,” Duncan Smith said. Former minister David Jones, the vice-chair of the influential European Research Group of Eurosceptic Tory backbenchers, said there was little purpose protracting talks if the two sides were still poles apart. “There will be a time when the UK should say – is there any purpose in continuing this?” he said. “It is not a question of flouncing off, but at some point one party has to make the call. “With the approach of the end of transition period, it cannot go beyond the end of next week. We are coming to the end of the road, including the EU’s capacity to ratify a deal.” Multiple cabinet sources underlined that Johnson would have no issue with his cabinet were he to walk away from the talks. Shortly after his call with von der Leyen, Johnson spoke directly to the cabinet in what was described as a “very brief update call” where he confirmed negotiations would be continuing into next week. There was no debate to be had, one cabinet source said, and very few cabinet ministers took the opportunity to offer any comment. “Everyone is agreed about the position to keep negotiating as long as it is worthwhile – and everyone is behind the PM in pursuing Australia-style terms if not,” one cabinet source said, a reference to leaving without a deal. Though cabinet ministers have given a public display of support, departments are lobbying behind the scenes for a no-deal bailout fund after reports over the weekend that the government was planning resilience deals for sheep farmers, fishermen, car manufacturers and chemical suppliers. Environment secretary George Eustice, the cabinet office minister Michael Gove and the Scottish, Welsh and Northern Ireland secretaries Alister Jack, Simon Hart and Brandon Lewis were reported to be working on the plans which are yet to get the chancellor Rishi Sunak’s buy-in. A Treasury source said HM Treasury was definitively not working on a bailout plan though another government source said cabinet ministers were lobbying the chancellor. Though the UK parliament will not have a legally binding vote, Jones said he believed it was the government’s intention to have a vote on the deal. The ERG has said it would like to consult with its legal panel of experts before making a decision whether to endorse the deal. “In parliament we would like to have time to scrutinise it and it will take several days. If there is a vote it will probably have to be between Christmas and New Year,” Jones said. Former cabinet minister John Redwood suggested hardline Brexiteers may not be happy with any form of deal presented by Johnson. “A long complex legal agreement that locks the UK back into many features of the EU that hinder us is not the Christmas present the UK needs,” he said. However, a number of senior Conservative MPs who had expressed fears in recent days at the prospect of no deal welcomed the commitment to more talks. Former health minister Stephen Hammond said: “All efforts must be made to reach an agreement. Ending the year without a FTA would be bad for the UK and EU. I really urge the negotiating teams to keep working to find a pragmatic solution – for the benefit of all our citizens.” Damian Green, a former cabinet minister, said: “No deal would be terrible. So continuing the talks is good news.” The UK shadow business secretary, Ed Miliband, urged the prime minister to keep talking – giving the strongest confirmation yet that his party would back a deal in parliament, despite protestations from his party. Asked if Labour would vote for a deal if it were achieved, Miliband said his party had said: “We’re minded to support it.”