Brexit Secretary David Davis said Sunday Britain will not honour financial commitments agreed this week with the European Union if they fail to secure a future trade deal.
"No deal means that we won't be paying the money," he told the BBC.
"It is conditional on an outcome. It is conditional on getting an implementation period, it is conditional on a trade outcome," he said.
Under an initial agreement reached with the EU on Friday, Britain will pay a financial settlement of between £35 billion-£39 billion (40-45 billion euros, $47-52 billion) for leaving the bloc in March 2019.
The 15-page document, detailing post-Brexit arrangements for citizens' rights and the Irish border, was hammered out after nearly six months of negotiations and now allows the talks to move on to a future trade deal.
Davis' stance contradicts comments from Hammond on Wednesday, who said London would pay the bill regardless of their outcome.
"Nothing is agreed until everything is agreed in this negotiation," he told a parliamentary committee.
"But I find it inconceivable that we as a nation would be walking away from an obligation that we recognised as an obligation," he said.
"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."
A spokeswoman for the Treasury reached Sunday declined to comment.
Davis' interview also sparked reaction in Dublin, after the Brexit minister told the BBC the agreement struck was "a statement of intent" rather than "legally enforceable".
Ireland responded that the deal was "binding" and it would hold Britain accountable -- branding his comments "bizarre".
Joe McHugh, the Irish government's chief whip, told the country's RTE broadcaster: "We will as a government, a sovereign government in Ireland, be holding the United Kingdom to account, as will the European Union.
"My question to anybody within the British Government would be, why would there be an agreement, a set of principled agreements, in order to get to phase two, if they weren't going to be held up? That just sounds bizarre to me.
"This, as far as we're concerned, is a binding agreement, an agreement in principle," he added.
Davis also said Sunday the chances of Britain leaving the EU without a wide-ranging future agreement had "dropped dramatically" following Friday's agreement.
He added he could now envisage a Canada-style free trade deal between Britain and the bloc, which would be far more extensive, and he called "Canada plus plus plus."
"We want an overarching free trade deal... but including services, which Canada doesn't (have), with individual specific arrangments for aviation, for nuclear, for data," he said.