EU making contingency plans for 'no deal' Brexit, Michel Barnier warns

The EU’s chief negotiator says he wants to avoid the collapse of the talks but it is a ‘possibility’

Michel Barnier has called on the UK to up its financial offer if it wants to the talks to succeed (EPA)

The EU’s chief negotiator has warned that the bloc is drawing up contingency plans in case Brexit talks collapse.

Michel Barnier said that failing to reach a deal with the UK was not his preferred option but was a “possibility”.

He told French newspaper, Le Journal du Dimanche: “Everyone needs to plan for it, member states and businesses alike. We too are making technical preparations for it. On 29 March 2019, the United Kingdom will become a third country.”

He said the UK must increase its financial offer, which is currently believed to be around €60bn (£53bn), before the talks are to move on to discuss the future trading relationship the UK desperately wants to map out before they leave.

The divorce bill go towards the pensions of EU officials and various EU-wide schemes, such as infrastructure projects, that the UK had already agreed to before the referendum.

Member states are due to decide at a summit in Brussels on 14 and 15 December whether “sufficient progress” has been made on the core separation issues –such as the divorce bill, the Irish border and rights for EU citizens in the UK – before they move onto the next stage of the talks.

The remarks come just after Mr Barnier gave the UK just a two-week deadline to give the other 27 EU members greater clarity on their proposal for the financial settlement or “divorce bill”.

But Brexit Secretary David Davis rejected his calls for greater clarification during an interview on Sky News, saying: “In every negotiation each side tries to control the timetable. The real deadline on this, of course, is December. It’s the December council.

“Your viewers are all taxpayers I suspect, one way or another, and they would not want me to just come along and give away billions of pounds.”

The Government has been widely criticised for its approach to the Brexit negotiations which has seen Cabinet members saying contradictory things about what they want to come out of the process.

Home Secretary Amber Rudd said she thought the idea of the UK crashing out without a deal would be “unthinkable” but Foreign Secretary Boris Johnson then wrote an opinion piece insisting “no deal must be an option”.

Jeremy Corbyn, writing in The Sunday Times, said Theresa May must get a grip on her government and said it was time for her “to stop dithering and decide” whether to govern or “move out of the way and let Labour deliver a Brexit that works for the many, not the few”.

He said instead Labour would offer a “jobs-first” Brexit which will include “a new co-operative relationship with Europe” and a “time-limited transitional deal on the same basic terms as now”.

It comes as MPs on both sides of the aisle warned Ms May that she faces defeat in the Commons if she continues to deny Parliament a meaningful vote on the final deal.

On the other side, a leaked letter to Ms May from prominent leavers – Mr Johnson and Environment Secretary Michael Gove – was revealed by the Mail on Sunday.

It is believed to have been a veiled attack on Chancellor Philip Hammond, a noted Remainer, for being soft on Brexit and lacking “sufficient energy”.

The letter called on members of her team to “clarify their minds” and “internalise the logic”.