David Davis has said the last-minute deal Theresa May struck in talks with the EU on Friday is not "legally enforceable".
Appearing on the BBC's Andrew Marr Show, the Brexit secretary appeared to contradict Chancellor Philip Hammond, who previously said it was "inconceivable" the UK would fail to honour its international obligations.
Mr Davis said Britain would not pay a £39 billion exit deal if it fails to secure a trade deal.
Pressed on the Chancellor's remarks regarding the exit payment, Mr Davis said: "No. It is conditional on an outcome. I am afraid that wasn't quite right.
"It is conditional. It is conditional on getting an implementation period. Conditional on a trade outcome.
"No deal means that we won't be paying the money."
Asked if the Chancellor was wrong, Mr Davis said: "It has been made clear by No 10 already. So that's not actually new."
When asked at a Commons Treasury Committee meeting last week whether Britain's divorce bill was contingent on a trade deal, the Chancellor said: "Nothing is agreed until everything is agreed in this negotiation.
"But I find it inconceivable that we as a nation would be walking away from an obligation that we recognised as an obligation.
"That is not a credible scenario. That is not the kind of country we are. Frankly, it would not make us a credible partner for future international agreements."
Mr Davis said the chances of Britain leaving the EU without a trade deal have now "dropped dramatically".
The Cabinet heavyweight insisted that the agreement secured with Brussels to trigger talks on a post-Brexit relationship made the prospect of the UK being forced back into World Trade Organisation (WTO) tariff trading arrangements after withdrawal much less likely.
Mr Davis said: "The odds, as it were, against a WTO, or no deal outcome, have dropped dramatically."
