May said Monday that she had secured "legally binding changes" to her Brexit deal, which addressed concerns over the Irish backstop, an insurance policy created to avoid a hard border in Ireland.
May said documents to be added to the deal provided "legally binding" assurances that the backstop would be temporary and that Britain would have a way to get out of it if the European Union failed to negotiate in good faith.
But the great majority of lawmakers, including most Conservative members of Parliament, will vote against a no-deal Brexit because they believe it would be economically damaging and disruptive.
His legal opinion sent Sterling sharply lower and dented risk appetite more generally as the chances rose that May will lose the vote on her deal in the UK Parliament that is due to take place at 1900 GMT.
The agreement was resoundingly voted down in January on the issue of the "backstop" is meant to avoid a hard border between Ireland (EU state) and Northern Ireland (part of UK), but many see it as an EU ploy to keep in the United Kingdom within the customs union and the single market. These had equal legal force with the withdrawal agreement, he claimed.
May - who will chair a meeting of her cabinet this morning - now faces an anxious wait to see if the new-look deal has won the backing of the DUP and Tory Brexiteer backbenchers.
The motion put forward by the government said the joint instrument "reduces the risk" that the United Kingdom would be trapped in the backstop.
Mark Francois, vice chairman of the ERG, said he was "wholly unconvinced" by the deal and added that many of his colleagues felt the same way.
Shadow Brexit secretary Sir Keir Starmer said: "The Attorney General has confirmed that there have been no significant changes to the Withdrawal Agreement despite the legal documents that were agreed last night".
While she lost, the margin of defeat was smaller than the record 230-vote loss her deal suffered in January.
Today (12 March), UK parliament will vote on whether to accept May's Brexit deal or not.
May might even try a third time to get parliamentary support in the hope that hardline eurosceptic MPs in her Conservative Party, the most vocal critics of her withdrawal treaty, might change their minds if it becomes more likely that Britain might stay in the European Union after all.
If EU leaders say no to a short extension but yes to a longer extension MPs will then have to vote on the offer of a longer extension. Afterward, hard-core Brexit supporters in May's Conservative Party and the prime minister's allies in Northern Ireland's Democratic Unionist Party both said they could not support the deal.