Attempts to keep the UK in the European Economic Area after Brexit have been defeated in the House of Commons, amid a major Labour revolt over the issue.
A Lords amendment to the EU Withdrawal Bill, committing the UK to retain EEA membership after it leaves next year, was reversed by 327 votes to 126.
Jeremy Corbyn urged his MPs to abstain but 75 voted for and 15 against.
Shadow minster Laura Smith and four junior aides quit their jobs in order to defy the party whip over the issue.
Earlier, Labour failed in an attempt to amend the EU Withdrawal Bill with their own alternative motion to guarantee “full access” to European markets after Brexit but outside the EEA.
This was defeated by 322 votes to 240 in Parliament.
The government won the EEA vote comfortably after Labour abstained, although a handful of Tory MPs, including former attorney general Dominic Grieve, indicated they would back the motion.
All members of the EU also belong to the EEA alongside non-EU countries such as Norway and Lichtenstein. The latter have full access to the EU single market but are obliged, in return, to make a financial contribution and accept he majority of EU laws.
The free movement of people also applies in the zone as it does in the EU.
During Commons exchanges, supporters of the EEA said it would be an economic “lifeboat” for the UK after Brexit, but critics said it would in effect nullify the result of the 2016 referendum.
In a statement, Jeremy Corbyn said he understood the “difficulties” facing MPs “representing constituencies which voted strongly for Leave or Remain” on the issue of the EEA.
But he insisted Labour could not support the so-called Norway model as he did not believe it was the “right option” for the UK.
“It would leave us with next to no say over rules we have to follow, it does not allow us to negotiate a new comprehensive UK-EU customs union and it fails to resolve the Irish border issue,” he said.
MPs also overturned other changes made to the bill by the Lords, including a requirement for ministers to set out steps to negotiate a customs union with the EU.
The government agreed a compromise with potential Tory rebels earlier this week to work towards a “customs arrangement” with the EU. This won the support of the Commons by 325 votes to 298.
On the second day of debate on the UK’s flagship Brexit legislation, ministers conceded changes on refugee policy after Brexit.
They accepted a proposal by Labour MP Yvette Cooper to widen the terms under which unaccompanied child refugees could be reunited with family members living in the UK.
The government had already agreed to allow unaccompanied children to claim asylum in the UK if it was deemed to be in their “best interests”.
But, following Ms Cooper’s intervention, ministers have agreed to drop a clause stating this could only happen if the family members already in the UK were over 18 years of age.
Solicitor General Robert Buckland said ministers had listened “very carefully” to the views of MPs from different parties and would amend the bill when it returns to the Lords next week.