The advice was issued the morning after Mrs May's dash to Strasbourg to finalise a deal with Jean-Claude Juncker which she said would deliver "legally-binding" reassurances for MPs to ensure the Irish backstop can not be permanent. As a result, GBP has dropped and risk appetite more generally has tumbled.
May's fellow Conservative Members of Parliament is a blow to the Prime Minister and it means that her Brexit deal is likely to be defeated by MPs in a vote scheduled for 7 p.m. Tuesday.
"The attorney-general has confirmed that there have been no significant changes to the withdrawal agreement, despite the legal documents that were agreed last night", Keir Starmer, a Labour Party MP, said in a statement. "For the European Union it's of utmost importance that the integrity of the single market be preserved, and that there be no hard border between Northern Ireland and Ireland".
The border has been open and unguarded for 20 years since the Good Friday agreement ended the armed conflict in Northern Ireland, but that status will be much more hard to maintain once Britain is no longer part of the EU. If you missed it, here's a recording.
Announcing the breakthrough in Britain's House of Commons, Cabinet Office Minister David Lidington said lawmakers faced "a fundamental choice ... to vote for the improved deal or to plunge this country into a political crisis".
Mr Juncker warned that if MPs voted down the deal a second time, "there will be no third chance".
Andrea Leadsom, who manages government business in parliament, insisted however that "it is still our intention, if at all possible, to leave the European Union on March 29 with a good deal".
She said the legal arguments were set to "rage" all day, with Attorney General Geoffrey Cox expected to update his advice on the deal, as he faces pressure to appear in person before MPs.
According to Geoffrey Cox, the United Kingdom may not be able to leave the Irish backstop without the EU's agreement.
A favourable vote would clear the way for Britain to leave the European Union on March 29 - almost three years after Britain backed withdrawal from the bloc in a referendum.
Scrambling to plot an orderly path out of the Brexit maze just days before the United Kingdom is due to leave, May rushed to Strasbourg on Monday to agree "legally binding" assurances with European Commission President Jean-Claude Juncker.
"To win today's vote, May needs to persuade 116 of the 230 MPs who voted against her last time to change their minds - a very tall order".
Juncker on Monday said a delay beyond European Parliament elections at the end of May would mean Britain would have to take part in the polls.
"If there is a solution to the current impasse, it can only be found in London", it said, adding that "today's vote has significantly increased the likelihood of a "no-deal" Brexit".
But the rest of the EU is reluctant to postpone Brexit beyond the late May elections for the EU's legislature, the European Parliament.
The defeat came after May and European Commission President Jean-Claude Juncker announced changes Monday created to overcome lawmakers' concerns about provisions created to ensure the border between EU member Ireland and Britain's Northern Ireland remains open after Brexit.