Rebel Conservative MPs have joined forces with Labour to inflict a fresh blow on Theresa May's government in a Commons Brexit vote.
It means the government will have to come up with fresh plans within three days if Mrs May's EU withdrawal deal is rejected by MPs next week.
It could also open the door to alternatives, such as a referendum.
Mrs May's office said the deal was in the national interest but if MPs disagreed, the government would "respond quickly".
The setback for the Prime Minister came as MPs started five days of debate on the withdrawal agreement with the EU, and the framework for future relations, ahead of the meaningful vote next week.
The government was expecting to have 21 days to come up with a "plan B" for Brexit if, as widely expected, Mrs May's deal is voted down.
But MPs backed calls for it to respond within three working Parliamentary days, a deadline likely to fall on Monday 21 January.
The government lost by 11 votes, with 297 MPs siding with them and 308 against.
Downing Street said it would consider the repercussions of today's defeat but its intention had always been to "provide certainty" as soon as possible.
Labour has said it will table a motion of no confidence in the government if Mrs May's deal is voted down.
Shadow Brexit Secretary Sir Keir Starmer said Parliament had to "take control of what happens next" and promised Labour would play a constructive role in the process.
But he warned the UK's options were narrowing given the need to avoid, at all costs, a no-deal exit which he claimed was "simply not viable for practical reasons".
The Commons defeat is the second in the space of 24 hours for the government on Brexit.
MPs, headed by former Tory ministers Mr Grieve and Oliver Letwin, defied the government on an amendment aimed at making it more difficult to leave the EU without a deal.
The clashes in the Commons came as the PM, who cancelled a vote on her deal last month at the last minute to avoid a humiliating defeat, launched a fresh push to convince MPs.
She is hoping new proposals on Northern Ireland will change enough MPs' minds to save the deal.
Under the plans, the Northern Ireland Assembly would have a say on new EU rules if the backstop plan to prevent physical checks on the Irish border comes into force after Brexit.
But the Democratic Unionist Party, on whom Theresa May relies for her Commons majority, have already rejected the so-called "Stormont lock" plans as "cosmetic" and "meaningless".
Ministers have also accepted calls for MPs to be able to vote next year on alternatives to activating the backstop, such as extending the proposed 21-month transition period.