The agreement hammered out at the prime minister's country residence resolves - for the moment - a long-running dispute within the Cabinet over whether to sever all ties with the European Union or seek a more limited Brexit to help businesses accustomed to trading with continental Europe without customs payments or burdensome paperwork.
A meeting involving the PM and Tory MPs on Monday evening will provide an indication of the strength of feeling in Mrs May's party.
Merkel again said it was the European Commission, rather than member states, which was leading the Brexit negotiations, possibly dampening May's hope of winning support from Germany before the so-called Chequers away day.
Meanwhile, it emerged that Foreign Secretary Boris Johnson backed the proposals at Chequers despite claiming that defending the plans was like "polishing a turd".
Mr Davis' exit may embolden Brexiteer backbenchers with concerns about Mrs May's leadership.
In the Commons, Mrs May will acknowledge that there have been "robust views" around the Cabinet table and a "spirited national debate" since the 2016 referendum decision to leave the EU.
"Over that time, I've listened to every possible idea and every possible version of Brexit. This is the right Brexit".
Mr Gove told the BBC her plan was a compromise.
May won backing from her ministers on Friday for a "business friendly" Brexit plan that would push for a free trade area for goods and continued close ties with the EU.
But Parliament would oversee the UK's trade policy and have the ability to "choose" to diverge from the European Union rules.
Tory Brexiteers have been urged to get behind Theresa May as she faced a backlash over her Chequers plan.
Their analysis produced five different scenarios based on three key factors: whether the UK is part of the EU Customs Union or has a bespoke customs deal; whether or not the UK is in the Single Market, has a bespoke single market deal, or no deal at all; and whether or not the UK has to adopt WTO tariffs in the event of no bespoke deal being struck with the EU. "They are wrong", she will say.
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The government's full "white paper" policy document due to be published next week will cover four main areas.
Tory MP Andrew Bridgen told the Press Association: "I can't support the offer which emerged at Chequers - I think it's a breach of the red lines, in fact the offer is so poor that I couldn't support it even if the European Union were paying us for it".
Veteran eurosceptic MP Bill Cash also told the BBC he was "deeply disappointed".
If he receives 48 names, there will be an automatic contest.
Writing in The Daily Telegraph, Mr Rees-Mogg said: "If the proposals are as they now appear, I will vote against them and others may well do the same".
May has previously said breaking free of the ECJ's jurisdiction meant that Britain would be able to make its own laws and British judges and courts would enforce them.
Appearing on the BBC's The Andrew Marr sShow on Sunday, he said: "I'm a realist and one of the things about politics is you mustn't, you shouldn't, make the flawless the enemy of the good".
The 30-strong Cabinet is being sequestered Friday inside the prime minister's Chequers country retreat - without their phones - to discuss a compromise plan that May hopes will unite the government, and be accepted by the bloc.
Mr Gove said the onus was now on Brussels to be flexible, with Britain stepping up preparations to show it can walk away from the negotiations without a deal if necessary in March 2019.
An analysis of the Chequers statement circulating within Mr Rees-Mogg's European Research Group of Tories was damning about the plans.
A Downing Street source said MPs will continue to be briefed on the plans, and officials will explain how it does not "breach our manifesto pledges, or our Brexit red lines".
Scottish First Minister Nicola Sturgeon said it was "game on" for the SNP and others who wanted the United Kingdom to remain in the existing customs union and single market.