Attempts to keep the UK in the European Economic Area after Brexit were defeated in the House of Commons despite dozens of Labor MPs defying the leader's instructions on the issue.
MPs voted by 327 to 126 against a House of Lords proposal for a close relationship with the EU like Norway's.
Jeremy Corbyn urged his MPs to abstain but 75 voted for and 15 against, while six quit their frontbench roles.
MPs overturned six further amendments peers had put forward.
MPs were deciding whether the UK should stay part of the European Economic Area after it leaves the EU - a similar arrangement to non-EU countries Norway, Iceland and Liechtenstein.
Like EU members, these countries are part of the EU single market - in return they are obliged to make a financial contribution and accept the majority of EU laws. The free movement of people also applies in the zone as it does in the EU.
Supporters of the EEA argue it would give the UK the closest possible relationship with the EU without actually being a member, as it would offer full access to the single market.
Source: News Agencies, Edited by website team