By Kylie MacLellan and Michael Holden
LONDON (Reuters) - Brexit-supporting lawmakers in British Prime Minister Theresa May's party publicly pledged support for her on Wednesday after media reports of a plot to oust her by rebels unhappy with her proposals for exiting the European Union.
Since her botched bet on a snap election in June 2017 lost her party its majority in parliament, May has faced persistent talk of a leadership challenge which has weakened her as she tries to clinch a Brexit deal with the European Union.
About 50 lawmakers from the European Research Group (ERG), a grouping in May's Conservative Party which wants a sharper break with the EU, met on Tuesday night and openly discussed May's future, the BBC reported. It quoted comments from those at the meeting, such as "everyone I know says she has to go", "she's a disaster" and "this can't go on."
But whatever was said in private, leaders of the group said on Tuesday they still want May to stay on.
"The policy needs to be changed but I am supporting the person," Jacob Rees-Mogg, the ERG leader, told reporters,
"Theresa May has enormous virtues, she is a fantastically dutiful prime minister and she has my support - I just want her to change one item of policy."
May's spokesman said the prime minister would fight any attempt to oust her, adding that the government was focused on taking forward her so-called Chequers proposals which he described as the only credible plan for Brexit.
May's proposals, named for a country house where they were hashed out in July, call for free trade of goods with the EU, with Britain accepting a "common rulebook" that would apply to those goods. Eurosceptics in her party say that would leave Britain subject to decisions in Brussels without any input.
Former Brexit Secretary David Davis, who quit the cabinet in July over the proposals, told reporters he expected May's government to change course on Brexit after an informal meeting of EU leaders in Salzburg next week.
"I disagree with her on one issue," Davis said. "She should stay in place because we need stability and we need decent government."
"My view is they'll end up in a different place, a reset, after Salzburg," Davis added.
The pound fell against the dollar to as low as $1.2994 on reports about lawmaker discussions about May's exit, but later recovered to trade flat at $1.3028.
The United Kingdom is due to leave the European Union on March 29. The EU and Britain hope to clinch a deal later this year so parliaments on both sides can ratify it before Brexit.
European Commission head Jean-Claude Juncker on Wednesday renewed a pledge of close trade and security ties with Britain after Brexit, but said the EU would not compromise on key withdrawal terms.
The EU's chief negotiator, Michel Barnier, said on Monday that a Brexit deal was possible "within six or eight weeks" if negotiators were realistic in their demands.
Even a small rebellion inside May's party on a vote over a final deal could spell the end of her minority government and throw Britain's exit into chaos.
Michael Gove, May's environment minister and a leading Brexiteer, told BBC radio: "I want to ensure that we get a solid vote, which I’m sure we will, when the prime minister brings back the treaty," adding lawmakers should rally behind May.
Gove is one of the most visible Brexit campaigners still in the cabinet after Foreign Secretary Boris Johnson and Davis quit in July saying May's plan would keep too much EU influence. The rift deepened this week with Johnson comparing May's plan to a "suicide vest" on Britain's constitution.
Some rebel lawmakers at the Tuesday meeting said they had submitted letters of no confidence in May, the source told the BBC. Under Conservative rules, a leadership election is triggered if 15 percent of Conservative lawmakers demand a vote of no confidence. That would require letters from 48 of the 315 Conservative members of parliament.
May's government says its critics have failed to present a viable alternative to her Chequers proposal. The ERG on Wednesday unveiled its proposal for how Britain could leave the EU without constructing a hard border between Northern Ireland and Ireland, one of the main sticking points in negotiations.
The proposal included using customs declarations ahead of travel and inspections of goods before they are shipped. The British government has rejected similar proposals in the past.
(Additional reporting by Writing by Guy Faulconbridge, editing by Janet Lawrence and Peter Graff)