THE EUROPEAN Union has told Britain it has between just two and three weeks to set out how much it is prepared to pay in the Brexit divorce settlement.
Brussels chiefs have warned that if the UK refuses to meet the tight deadline, the bloc could struggle to prepare a transition deal and risk surpassing the March 2019 Brexit deadline.
Britain is now expected to make a sizeable financial offer this month in order that preliminary transition negotiations can take place at December’s crucial summit.
A senior EU negotiator told the FT: “We need to know soon. There isn’t much time, there are no shortcuts.”
The news comes as UK and EU negotiators prepare to meet in Brussels for the sixth round of Brexit talks amid high tensions following a lack of “sufficient progress” during earlier meetings.
Theresa May is keen for transition talks to get underway as soon as possible to allay businesses’ fears about a cliff-edge Brexit, but the divorce bill has been a sticking point since talks began and remains one of the three major issues - along with the Irish border and citizens’ rights - where little progress has been made.
The EU has given a rough net estimate of £53billion (€60billion) for the Brexit bill, a significantly smaller sum than the reported €100billion first floated by the EU. However, some Brexiteers are still demanding Britain leaves the bloc without paying a penny.
The British Government is keen for the EU to offer more certainty that the bloc will reciprocate and simultaneously agree the outlines of a transition deal in December before any divorce bill is paid.
One EU diplomat described the situation as a “chicken and egg” dilemma, with the EU only willing to work on transition guidelines if Britain shows it will make “sufficient progress” on financial issues before the end of this month.
Meanwhile, pro-Brexit group Leave Means Leave has raised concerns the EU may be trying to trap Britain under EU jurisdiction for another two years.
The EU plans would see Britain officially leave the bloc in March 2019 but then be governed by EU laws and institutions for another two years without being allowed to sit at the table making decisions.
The revelations have led Leave Means Leave, which is backed by more than 50 Tory MPs and MEPs, to call on Mrs May to reconsider her plans.
The Commission’s document notes that it believes Mrs May’s request for a transition period of about two years "would require a temporary application of Union law to and within the United Kingdom together with regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures".
It also notes "a non-member of the Union, that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member".
Richard Tice, co-chairman of Leave Means Leave said: "The EU want Britain to remain trapped in the EU during a transition period, abiding by the laws of the EU and still funding the EU.
“At the same time it wants Britain to be completely powerless in the EU, unable to take advantage of our Brexit opportunities.
"Accepting this wouldn't just be a bad deal - it would be a disastrous deal and our Government must not fall for the vested interests of the CBI and the multinationals who support such a plan.”
He added: "It is becoming increasingly clear - given the behaviour of the EU - that Britain would be better to leave the EU in March 2019 and revert to a World Trade Organisation based deal which is a perfectly sensible plan that will help British business to thrive."