The work and pensions secretary admitted her mind had “changed” about trying to fight Britain leaving the EU on 31 October without a withdrawal agreement.
She had previously defied the Tory whip by abstaining on a vote to rule out no-deal in March, and warned in a joint article with two other ministers that “it would be better” to delay Brexit than “crash out of the EU”.
But speaking on the BBC’s Andrew Marr show on Sunday, the Hastings MP said the circumstances had now changed because there was time to use the threat of no-deal to get a better deal.
“We now need to allow no-deal to be part of the leverage to make sure that people compromise more,” she said. “I hope that the EU will compromise.”
“I still think that no-deal would be bad for the economy, security and the union.”
Ms Rudd, who is backing Jeremy Hunt in the Tory leadership race, took a stronger stance against the idea the next prime minister could prorogue parliament.
She ruled out joining former prime minister John Major, who has threatened to take the government to court if it tries to pursue that route.
“I think that proroguing parliament would be a mistake,” she said.
“I would use my own tactics to try and stop that happening, and I encourage anyone else to consider their own version as well.”
Gina Miller, the lawyer who successfully won a court ruling forcing Theresa May to consult MPs on starting the countdown to Brexit, has threatened to challenge any decision to suspend parliament in a similar style.
She thinks it would be an “abuse of power” but denies she is trying to make a “political point”.
“I think any form of Brexit would diminish us as a country,” she told Sky News’ Sophy Ridge on Sunday.
“But that is completely separate – that is my own personal view… It is about the black and white letter of the law.”
Tory MP Priti Patel, who is backing Boris Johnson to be the next prime minister, said Brexit should not be “sub-contracted out to the courts… telling elected governments what can and can’t be done”.