- Video report by ITV News Political Correspondent Carl Dinnen
Part of the Government's emergency contingency plans will see 3,500 troops made available in case of disruption caused by a potential no-deal outcome.
Defence Secretary Gavin Williamson told MPs that regulars and reservists will be "held at readiness" in order to support any department which requires their assistance with contingency plans.
The announcement comes as Theresa May ramps up planning for a no-deal Brexit after Cabinet ministers agreed to make it an “operational priority” for the Government.
- Video report by ITV News Political Correspondent Paul Brand
The Prime Minister’s Brexit deal remains the preferred outcome for the Government but with 101 days until the UK’s departure from the bloc, the intensity of preparations for crashing out in March 2019 will increase.
"We've as yet not had any formal request from any Government department but what we are doing is putting contingency plans in place, and what we will do is have 3,500 service personnel held at readiness - including regulars and reserves - in order to support any Government department on any contingencies they may need," Mr Williamson said.
Labour MP Ian Murray, a supporter of the pro-EU Best for Britain campaign, said in a statement outside the Commons: "This is the reality of a no-deal Brexit: soldiers on the streets, medicines being stockpiled in the NHS, and airports and ferry terminals grinding to a halt.
"This is scary tactics, pure and simple."
Brexit Secretary Steve Barclay stressed that unless MPs back Mrs May’s deal when it returns to the Commons in January the default option is for the UK to leave without any exit arrangement in place.
The Cabinet has urged businesses to consider implementing their own contingency plans and said households should also make preparations in case such a outcome should occur.
Downing Street stressed that it remains the Government's "top priority" to deliver Brexit under the terms of the deal struck by Mrs May with Brussels, and the Prime Minister's official spokesman insisted that this remains "the most likely scenario".
Speaking after the Cabinet agreed to step up no-deal preparation, Mr Barclay said: “Parliament needs to back the deal because the consequence of not doing so is we risk the default of no-deal and a responsible government must prepare for that eventuality.
“That is what we agreed at Cabinet. That is what we are going to do.”
He dismissed alternative plans being pushed by ministers – including a second referendum or a “managed” no-deal under which arrangements are made with Brussels to limit any negative impacts of severing ties with the EU.
“There are a number of scenarios being floated in government without, I think, people really engaging on the consequences of that – either the consequence to our democracy of not delivering on the referendum, not having Brexit – or the idea that we can cherry-pick and have some managed no-deal where the EU will suspend its own red lines, which I don’t think is feasible.”
In a direct plea to the UK’s business community, Mr Barclay urged company bosses to make sure they were ready for a no-deal Brexit, telling them it needs to be “much more of a priority for businesses up and down the country”.
Around £2 billion has already been allocated for spending by Whitehall departments for Brexit preparations, and Chancellor Philip Hammond announced on Tuesday evening how a further £2 billion will be shared out.
The extra funding for 2019/20 will be focused on priority areas including borders, trade and security.
Twenty-five Government departments will receive additional money, with the Home Office set to receive almost one quarter of the sum - £480 million - to increase Border Force capability with "hundreds of new officers", and to help it prepare the EU Settlement Scheme.
The Department for Environment, Food and Rural Affairs (Defra) will be given £410 million, HM Revenue and Customs £375 million, the Department for Business, Energy and Industrial Strategy (Beis) £190 million and the Department for International Trade £128 million.
In the coming days, companies across the country will be provided with a 100-plus page online pack to help them prepare for a no-deal Brexit.
E-mails to 80,000 of those most likely to be affected will be sent over the next few days.
Some of the funding will be put towards public service announcement telling people how to cope.
However, ITV News Political Correspondent Carl Dinnen reported that not all Cabinet members were happy with the £2 billion worth of spending plans agreed for a no-deal Brexit.
During Tuesday's meeting, Work and Pensions Secretary Amber Rudd encouraged those attending to back the need to plan for a no-deal Brexit.
Ms Rudd said that ramping up the preparations did not mean a no-deal outcome, telling colleagues: "Just because you put a seatbelt on doesn't mean that you should crash the car."
The MP - who campaigned for Remain in the referendum - urged other ministers to consider job losses in their constituencies in the case of no-deal.
There is some concern about whether people should plan travel to Europe over the Easter holidays, but the Prime Minister's official spokesman said: "I'm not aware of any reason they shouldn't do that."
Labour has hit out at the plans calling them a "testament to the Prime Minister's failure in these negotiations that the Government is now spending billions of pounds of taxpayers' money to prepare for a no-deal Brexit that is rejected by Parliament and many of those sat around the Cabinet table.
"A no-deal Brexit would be a disaster for jobs, the economy and the border in Northern Ireland.
"It is simply not a viable option.
"Labour will work across Parliament to prevent no-deal and ensure the public don't pay the price for this Government's failure."
Meanwhile Lib Dem leader Sir Vince Cable called the plans "psychological warfare.
"The Conservative Government are attempting to scare MPs, businesses and the public with the threat of a no-deal.
"Theresa May is irresponsibly trying to run down the clock so that the only option is to support her discredited deal.
"It is time to stop playing political games with our future and take the issues at hand seriously.
"The only real way out of this deadlock is to hold a People's Vote, with the option to remain in the EU."