Theresa May has told Conservative Party MPs she will resign as prime minister once Britain has left the European Union as parliament prepares to vote on its Brexit options.

Conservative MP James Cartlidge told reporters, as he left a backbenchers meeting on Thursday morning (Australian time) that Ms May promised the gathering “she would not remain in post for the next phase of the negotiations”.

Ms May confirmed the announcement, releasing a statement saying: “I know there is a desire for a new approach – and new leadership – in the second phase of the Brexit negotiations,  and I won’t stand in the way of that.”

No date was given for the Prime Minister’s resignation.

Ms May, however, appeared to make her departure contingent on the passing of her unpopular Brexit deal.

“I know some people are worried that if you vote for the Withdrawal Agreement, I will take that as a mandate to rush on into phase two without the debate we need to have. I won’t. I hear what you are saying,” she said.

“But we need to get the deal through and deliver Brexit.”

The Prime Minister’s announcement came as MPs in the main chamber of Parliament debated eight Brexit options ranging from leaving the EU abruptly with no deal, to cancelling the departure or holding a new referendum.

MPs have so far rejected eight non-binding motions on alternatives to the EU withdrawal deal.

Motions on a second Brexit referendum and a plan for Britain to stay in a customs union attracted the highest number of votes in favour, but were both narrowly defeated.

Commons speaker John Bercow said following the “indicative” votes that a second stage of the process would still be held on Monday.

Britain was due to leave the EU on March 29, but Ms May secured a short delay after her Brexit deal with the EU was rejected overwhelmingly by lawmakers in two parliamentary votes.

The government is now expected to bring that deal back to Parliament for a third vote on Friday (local time).

Conservative MP Pauline Latham said Ms May’s resignation announcement was “inevitable”.

“I just feel she’s made the right decision. She has actually read the mood of the party, which was a surprise,” Ms Latham said.

Ms May’s Brexit deal, negotiated over two years, would see Britain leave the EU single market and customs union as well as EU political bodies.

But it requires some EU rules to apply unless ways can be found in the future to ensure no border is rebuilt between British-ruled Northern Ireland and EU member Ireland.

Many Conservative rebels have objected to this so-called Irish backstop, saying it risks binding Britain to the EU for years.

The deal was defeated in parliament by 149 votes on March 12 and by 230 votes on January 15.

European Council chief Donald Tusk urged the European parliament to be open to a long Brexit extension and not to ignore those British people who wanted to remain in the EU.

Almost six million people signed a petition in the past week calling for Britain to cancel Brexit, while hundreds of thousands marched in London on Saturday to demand a new referendum.

Most British voters think the negotiation has been handled badly, though there may now be a slight majority for staying in the EU, recent polls have shown.

-with AAP