EU unity starts to CRACK as member states edge away from hardliner Michel Barnier

The calls came after Mr Barnier, the EU’s chief Brexit negotiator, insisted Britain could not get a deal that allows its banks and financial services firms operate freely in the single market. 

But some of the 27 EU member states offers a different view on what the UK can expect for its lucrative financial services industry despite maintaining European unity was their main priority.

Luxembourg Prime Minister Xavier Bettel called for “pragmatism” and rejected “binary thinking” on the matter.

He said: “While I stick to the principle that there can be no cherry-picking, I still think that we should refrain from an orthodox or binary thinking.

“My top priority would be to limit the negative impact for both sides. Pragmatism will be needed in these negotiations on both sides.”

EU member states’ governments are still showing strong public support for Mr Barnier but officials in Brussels fear national interests will come to the fore when the second phase of talks gets under way. 

Dutch and Spanish finance chiefs met last week and while backing Barnier, they agreed they both wanted the softest deal possible to keep the UK close, according to insiders.

But hardliners say if Britain wants to control immigration and break free from the European courts it should not enjoy the advantages of countries that accept EU free-movement and judicial rules. 

Discussions on the future relationship are scheduled to start in March and end in October. 

The EU says it will offer the UK a deal like the one it gave Canada, which does not include financial services.

Pro-European MPs from Britain are set to meet Mr Barnier in Brussels today.

Tory rebels including Dominic Grieve and Anna Soubry will be among the delegation, along with Labour’s Chuka Umunn and Chris Leslie. 

The talks come as Remainers up the pressure for a softer approach to Brexit – with some demanding the process be cancelled altogether.

The government is also braced for more resistance to the EU Withdrawal Bill when it returns to the Commons tomorrow and Wednesday.