ONE MONTH TO PAY: Ultimatum on Brexit bill hangs over UK to move to trade talks

Despite EU members beginning to prepare for trade talks with the UK, talks have stalled since Theresa May’s Florence speech, with EU chiefs saying her offer of €20billion was not good enough.

And EU chiefs refuse to move to phase two of negotiations until “sufficient progress” is made on the divorce terms – largely surrounding the exit bill.

Senior officials in Brussels say the EU will not agree to trade talks at its December summit if more is not offered.

Italy’s Europe minister, Sandro Gozi, said there remains “a lot to do on financial obligations”. 

The other main divorce issues are EU nationals’ rights in the UK, the status of the Ireland-Northern Ireland border.

During Mrs May’s Florence speech, she pledged the UK will “honour commitments we have made during the period of our membership”. 

Brussels have demanded as much as £53 billion, which Mrs May could be willing to accept so talks can progress to Britain’s relationship with the bloc in December. 

However, if the money is paid, Mrs May could face criticism in the UK for bowing down to the EU’s demands. 

An EU official said: “Some believe that the worse it gets for the British, the better for us, that maybe we could delay it all until for instance March, increasing the uncertainty and triggering the contingency plans in the corporate sector.

“That would be ruthless and risky, but people have different views on what is risky.” 

After the fifth round of talks ended in October, the EU’s chief negotiator Michel Barnier said there was “deadlock” over the UK’s Brexit bill. 

Mr Barnier said not enough progress has been made to move to the next stage of Brexit trade talks.

The draft paper given to the 27 EU states by the European Council president Donald Tusk suggests free trade talks could open in December if Mrs May were to improve her offer on what the UK pays when it leaves. 

According to a document obtained by the Guardian, it will be impossible for the UK to get a finished trade deal by March 2019. 

The document questions how the EU can “ensure a level playing field” so the UK does not gain an unfair advantage.