The government was dealt another fresh Brexit blow tonight by the House of Lords as it voted to instruct ministers to negotiate the UK's involvement in the European Economic Area (EEA).
But Labour had a mutiny to deal with, as 83 peers (44 per cent of the party's total) defied the party whip to abstain in the division to vote alongside the Lib Dems in support of the amendment.
Peers voted 247 to 218 to make the amendment, which was raised by Labour's Lord Alli.
The amendment will now go back to the Commons where the government will look to reverse the proposed changes.
The rebellion of the Labour Lords will cause another headache for Jeremy Corbyn, who has not committed to keeping the UK in the single market despite the overwhelming consensus within his party.
It is the thirteenth defeat for May's government on Brexit in the Lords, and it follows a separate loss earlier today as peers voted to remove the date of 29 March 2019 from EU withdrawal legislation.
During the debate on the UK's EEA membership, Tory peer and Brexit minister Lord Callanan said the amendment "would not deliver control of our borders or our laws."
Labour spokesperson Baroness Hayter urged peers to abstain from the vote, as she told the House that the problem with the amendment was that it "defines the structure, not what we want to achieve."
Chuka Umunna, Labour MP for Streatham and prominent pro-EU campaigner tweeted that the amendment was a "fantastic result."
Sacked shadow cabinet minister Owen Smith also chimed in on the social networking site, writing: "Despite the whip, Labour peers voted in significant numbers tonight and have won the vote to keep the option of single market membership on the table – ensuring the Commons will now have a vote to do the same. Democracy in action!"