Prime Minister Boris Johnson has vowed to push for a General Election if EU leaders sanction a Brexit extension of up to three months.
Boris Johnson must now wait to hear from the heads of the EU27 after his plans to fast-track his Withdrawal Agreement Bill through the Commons before the Halloween deadline hit the buffers.
There was anger in Downing Street after MPs rejected Mr Johnson's plan to push through the legislation approving his deal with the EU in just three days by 322 votes to 308.
The development makes Mr Johnson's promise to take Britain out of the EU by October 31 "come what may" difficult to fulfil and means Brexit could be delayed until next year.
On a dramatic night in Westminster, the Leader of the Commons Jacob Rees-Mogg said Brexit was now "in purgatory where it is suffering the pains of those in purgatory".
Mr Rees-Mogg added it is "very hard to see how it is possible" for the Bill to pass through the Commons and the Lords before October 31.
The result leaves the Prime Minister effectively at the mercy of EU leaders who will decide whether to grant Britain a further extension, and for how long, in order to allow it to leave with a deal.
European Council president Donald Tusk said he would recommend they agree a further delay in order to avoid a no-deal Brexit.
The Daily Telegraph reported that Mr Johnson had begun calling EU leaders on Tuesday night to tell them he would not accept a three-month delay, but has reportedly not ruled out approving a short extension of around 10 days to allow his deal to get through Parliament.
A No 10 source indicated that if the Prime Minister was forced to accept a delay until the new year, he would push for a general election instead.
"On Saturday Parliament asked for a delay until January and today Parliament blew its last chance," the source said.
"If Parliament's delay is agreed by Brussels, then the only way the country can move on is with an election. This Parliament is broken."
Following the vote, Mr Johnson said he would "pause" the legislation while he consulted with EU leaders on what should happen next.
Just minutes earlier MPs voted to back the deal in principle by 329 to 299 on the second reading of the Bill, the first time the Commons has been prepared to support any Brexit deal.
The Prime Minister expressed "disappointment" that they had not been prepared to follow it up by agreeing the timetable motion.
He insisted it was still his policy that Britain should leave at Halloween but acknowledged he would have wait to hear what EU leaders said.
Under the terms of the so-called Benn Act, Mr Johnson was forced to write to the EU at the weekend seeking an extension to the end of January after failing to win the support of the Commons at Saturday's special sitting.
Before the vote, Mr Johnson had threatened to pull the whole Bill and go for a general election if the timetable motion was lost but he is yet to outline how he would go about it.
Jeremy Corbyn said Labour was prepared to work with the Government to agree "a reasonable timetable" to enable the Commons to debate and scrutinise the legislation properly.
"That would be the sensible way forward, and that's the offer I make on behalf of the opposition tonight," he said.
The Labour leader's offer potentially opens the way for Parliament to approve the Bill before the end of the year.
It also opens up increased opportunities for MPs to seek to amend the legislation in ways the Government would find unacceptable.
Tory MP Andrew Bridgen said he thinks the EU will grant a three-month extension and, speaking on BBC's Newsnight, he said: "There's no excuses now for Jeremy Corbyn not to give us that general election."
Asked about Mr Johnson's "do-or-die" promises to deliver Brexit on October 31, he said: "Everyone will have seen the way that Boris Johnson has tried to get Brexit across the line on the 31st of October."
He said that date was ruled out on Tuesday night, adding: "We're going to have to have an extension."