In October, DUP MP Ian Paisley said Boris Johnson told him he would “tear up” the protocol, which grants Northern Ireland access to both the UK and EU markets.

At least one major contract worth £360m would still have to be paid out, even if the clause was triggered, because there is no provision to cancel it if Article 16 is invoked.

There would also be substantial risk of legal action from companies contracted to implement customs checks on British goods travelling to Northern Ireland, as well as the European Commission, according to legal experts.

David Greene, senior partner of Edwin Coe, said companies that have missed out on those contracts could also make claims.

He said: “Triggering Article 16 carries with it the potential costs of terminating all the machinery and contracts attached to the protocol working as it stands, putting new machinery in place, as well as claims from third parties.”

A Government spokesman said: “It remains our preference to find a consensual way forward with the EU, but we will use the safeguard mechanism in the protocol if solutions cannot be found.

“The Northern Ireland Protocol is undermining the links between communities and threatening the Belfast (Good Friday) Agreement. We have a responsibility to fix it.”

The single largest outlay of public money to implement the protocol is the Trader Support Service (TSS), which gives guidance to businesses on navigating the new customs rules.  The two year contract, which has nearly 40,000 traders registered, will cost £360m by the end of 2022.

Mr Greene said: “This is a fixed term contract with limited ability to terminate it and it is not terminable in the event of a renegotiation or the exercise of Article 16.”

The TSS is run by a consortium headed by IT company Fujitsu, which refused to comment.

Government sources said it was “too early” to say what the protocol talks would mean for the scheme and said there was “flexibility” to adjust the existing contract if necessary. 

As well as the TSS, £150m has been pledged for a digital agrifood certification system and major IT systems for declaration, transit, safety and security and goods movement set up.

The Government has invested nearly £50m on facilities to check British agrifood goods entering Northern Ireland meet EU standards, which they must do under the terms of protocol.

Government sources said that if Article 16 was triggered, it would not entirely remove the protocol, which prevents a hard Irish border.

“This safeguard mechanism is a wholly legitimate part of the protocol that we agreed with the EU,” a Government spokesman said.

“It is designed to ease disruption for people and businesses in Northern Ireland, not to cause or compound it.”

Triggering Article 16 would not mean immediate changes but start a month-long consultation process with the EU.

But, in a sign of strained relations, senior EU figures, including negotiator Maros Sefcovic, have warned the bloc could cancel the Brexit trade deal if the clause was used.  

Mr Johnson would then come under pressure to ditch the protocol entirely because it is seen as part of the price for the free trade agreement with the EU.

“The expense to the public purse is nothing compared to that which could be lost if we get into trade frictions with the EU,” said Aodhan Connelly, director of the Northern Ireland Retail Consortium.