Amber Rudd said she has "accepted" the possibility of a no-deal Brexit, despite having previously fiercely opposed it.
The Work and Pensions Secretary said holding on to the option of leaving the EU without a deal was necessary for future negotiations, even though she had tried to force Theresa May to rule out no deal ahead of the original March 29 Brexit deadline.
"Both [Tory leadership] candidates have said that no deal is part of the armory and the negotiations going forward. And I have accepted that," she told talkRADIO's Julia Hartley-Brewer.
"The situation is that we are leaving by the end of October, but it would be so much better to get a deal."
Despite the U-turn in her stance on no deal, Ms Rudd insisted that "everybody's effort" must go into attempting to get a deal with Brussels.
"As we know, it isn't as straight forward as we would like it to be because the Prime Minister has tried on several occasions to do that," she added.
The cabinet minister said she was backing Jeremy Hunt in the leadership race, who has previously said a no-deal Brexit would be a "last resort".
It differs to his rival, Boris Johnson's stance, who told talkRADIO that Britain would leave the EU in October, "do or die".
He has also refused to rule out suspending Parliament in order to push a no-deal Brexit through.
Ms Rudd added: "I'm backing Jeremy Hunt because I think he's the best person to be able to get the best deal amended from the EU and be able to sell that in Parliament to people."