The Prime Minister is to use the EU event to try and make the case for moving Brexit talks on to trade negotiations quickly, but European leaders will now be left wondering if she still has the political support in London to deliver any deal.
There were cheers from opposition MPs in the House of Commons when it emerged the Government had been forced to accept changes to its EU Withdrawal Bill, which it is now claimed will guarantee Parliament a “meaningful” final vote on any Brexit deal Ms May agrees.
The embarrassing defeat – the first inflicted on Ms May as she pushes through her Brexit plans – came after Jeremy Corbyn ordered Labour MPs to back an amendment to her legislation proposed by ex-Conservative attorney general Dominic Grieve.
The result immediately exposed deep divisions on the Conservative benches, with reports of a heavy-handed Government whipping operation creating tension, blue-on-blue clashes in the Commons and one Tory rebel sacked from his senior party position within moments of opposing Ms May.
Rebels braced themselves for a wave of abuse from the Brexit-backing media, but insisted they had no choice but to put principle before party and vote against the Government.
Ms May was supposed to enjoy something of a victory at the EU council summit on Thursday, expected to rubber-stamp the judgment that “sufficient progress” has been made on divorce issues to move on to the next phase of talks.
But with difficult obstacles already arising in Brussels, the defeat in London lays bare the difficulties Ms May will have in delivering anything she agrees on the continent.
Following the blow, the Government immediately hinted it may try a parliamentary counteroffensive later in the legislative process to undo the change forced upon it.
A Government spokeswoman said: “We are disappointed that Parliament has voted for this amendment despite the strong assurances that we have set out. We are as clear as ever that this Bill, and the powers within it, are essential.
She added: “We will now determine whether further changes are needed to the Bill to ensure it fulfils its vital purpose.”
The key vote in the Commons came over Mr Grieve’s amendment seven, with the legal expert insisting it was necessary to prevent Ms May's flagship Brexit legislation becoming a “very worrying tool of executive power”.
Up to now Ms May had promised Parliament a say of sorts over the final deal she agrees in Brussels, but as it stood it would be a ‘take it or leave it’ vote and ministers would retain powers to enact any deal without first gaining Parliament’s permission.
The change means the terms of any Brexit deal must now first be approved with a full Act of Parliament – effectively allowing MPs to re-write parts of the deal before any of it is implemented by Ms May.
Ministers are now under heavy pressure to drop another part of Ms May’s proposals that would fix 29 March 2019 as Brexit day – opening the way for the Article 50 period to be extended to ensure Parliament can approve any deal before the UK drops out of the EU.
That part of the Bill was to be voted next week, but after the defeat Downing Street may conclude it will lose that too.
Ms May's whips applied heavy pressure on Conservative rebels and Justice Minister Dominic Raab offered minor concessions in the Commons, but rebels said it was too little too late.
In the end the Government was defeated by 309 votes to 305, a margin of just four votes. In total 11 Tory MPs voted against the Government, including eight former frontbenchers. A further Conservative MP abstained.
Speaking after the vote Mr Grieve struck a sorrowful tone, saying he “didn’t wish to rebel against the Government, it’s not something I make a habit of doing”.
He added: “To my mind I had no option but to continue with this. I had hoped even during the course of the afternoon that the Government would try to do something.
“But the proper thing to do was to table their own amendment, and so when five minutes before the end they come along and say well actually they are going to make a concession that was not fully explained, and I have to say falls a bit short of what’s needed, I had to make an immediate decision.”
Another ex-minister Stephen Hammond was sacked from his party role of Conservative vice-chairman after he rebelled with a “heavy heart”.
He said afterwards: “I made it very clear that for me this was a point of principle and just occasionally in one’s life, one has to put principle before party.
“I know that sounds pompous, but I’ve never done it before.”
He added: “The Government could have been a little bit swifter of foot. I think there was a way out of this, we were all very close, but the Government chose not to go that way.”
Ex-cabinet minister Nicky Morgan, also among Conservatives who refused to budge, tweeted that Parliament had acted to take back “control of the EU Withdrawal process.”
Meanwhile Anna Soubry MP said the Government had “got to stop playing silly games” and realise that times had changed since the Bill was drafted before the election, when Ms May had a Commons majority.
Labour said their whips’ efforts to convince Brexiteers in their own party to vote for Mr Grieve’s amendment had been crucial.
Leave-supporting Labour MPs all backed the Tory backbench amendment to inflict defeat on the Government.
Mr Corbyn said: “This defeat is a humiliating loss of authority for the Government on the eve of the European Council meeting.
"Labour has made the case since the referendum for a meaningful vote in Parliament on the terms of Britain's withdrawal from the European Union.”
Liberal Democrat Brexit Spokesperson Tom Brake said: “This is a momentous day for Parliament and a humiliating defeat for Theresa May.”
Conservative rebels were braced for a deluge of abuse from the Leave-backing media on Thursday, with Brexiteers in their own party already attacking them in and outside the chamber.
Nadine Dorries demanded her fellow Tory MPs be stripped of their seats in Parliament, tweeting that they had, “put a spring in Labours step, given them a taste of winning, guaranteed the party a weekend of bad press, undermined the PM and devalued her impact in Brussels.”
Sir Desmond Swayne told the Commons the rebel amendments simply aimed to delay Brexit, dismissing them as “sanctimonious guff” and their Conservative backers as “idiots”.
He added: “Now we see the real motive and of course he was assisted by others, who comrade Lenin would have properly referred to as useful idiots.”
Senior Tory Bernard Jenkin said: “To dress this attempt to reverse Brexit as an argument in favour of parliamentary sovereignty is nothing but cant.”
Hours after the vote, Ms May was on her way to Brussels to push European leaders to begin discussing the EU’s future trade deal with Britain.
The Prime Minister needs Brexit talks to move on to trade as quickly as possible, but European negotiators are warning that how the ‘transition period’ plays out must be decided first.
It is an early sign that the withdrawal agreement – reached after torturous negotiations and including a UK commitment to pay some £39bn to Brussels – has not automatically opened the way to trade talks.
A leaked draft of a text to be considered by the EU27 leaders on Friday suggests that trade talks may not start until after a subsequent summit in March.
The Cabinet, let alone the wider Conservative party in the Commons, is split over how the transition will take place, giving rise to concerns over how easy it will be for Ms May to deliver an agreed position in the light of the Commons defeat.
The European Parliament's chief Brexit co-ordinator Guy Verhofstadt tweeted: “British Parliament takes back control.
“European and British Parliament together will decide on the final agreement. Interests of the citizens will prevail over narrow party politics. A good day for democracy.”