The Chancellor said yesterday that there "broad acceptance” among cabinet ministers that an interim deal would be needed to smooth the exit process, and that it could last up the three years.
But Nigel Evans, the secretary of the 1922 committee of backbench Tory MPs, warned that a protracted transition could "keep the door open” to remaining in the EU.
"This must not be seen as a ruse to keep the door open to going back into the EU. It should come to an end well before the general election in 2022,” he said, adding that remainers would paint the vote as a chance to stay in the bloc.
His concerns were echoed by John Longworth, co-chairman of campaign group Leave Means Leave and former director-general of British Chambers of Commerce.
He warned that there was a "huge danger” that a transitional arrangement would allow Remainers to "buy time…so they can reverse the process”.
"We might end up in a situation where we have effectively the same relationship with the EU as we do now in all but name, and if we go into an election with that situation then it's quite possible that would become the permanent situation."
The Treasury said Mr Hammond had the backing of Downing Street for his comments. Foreign Secretary Boris Johnson, who is currently out of the UK, is likely to be the biggest opponent to the Chancellor’s position: he has not spoken public in support of Mr Hammond’s stance.
Last night the Foreign Office and the Treasury issued a joint statement saying the two men were "working together to take the UK out of the EU”, but did not mention any transitional arrangements.