David Davis says UK will walk out of EU negotiations unless bloc drops demand for €100bn payment

David Davis - credit: PA

David Davis has warned that the UK will walk away from Brexit negotiations unless the EU drops plans for Britain to pay €100bn when it leaves.

The Brexit Secretary told the Sunday Times talks would be plunged into “crisis” from the outset because Brussels has refused to discuss a trade deal before Britain settles its outstanding financial obligations.

He also warned that he considers even £1bn "a lot of money", claimed officials in the European Commission have "axes to grind" and accused other EU member states of failing to tell the truth.

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Responding to Davis’ remarks a senior EU negotiator told the same paper the chances of the UK leaving the EU without a fresh deal were now “over 50 per cent”.

Theresa May also today insisted money paid in the past by Britain must be factored in by the European Union when calculating the UK’s divorce bill from Brussels.

As member states prepare to sign off on a legally binding negotiating position tomorrow, sources claimed they will demand the UK pays more than €100bn in outstanding obligations.

In an interview with the Sunday Times Davis said: "We don’t need to just look like we can walk away, we need to be able to walk away. Under the circumstances, if that was necessary, we would be in a position to do it."

But a senior EU source told the paper: “For the first time in living memory there is a complete consensus: the net payers refuse to pay more cash into the budget and the net recipients refuse to accept losing some of their handouts — they all have a vested interest in maximising the amount that Britain will be due to pay upon leaving.”

When told of separate plans for every EU citizen who has lived in the UK to get full rights to live and work and claim benefits in Britain, Davis said: “How on earth would you manage such an exercise?”

A senior Brussels negotiator also predicted Davis would walk out of his first meeting with Michel Barnier, the EU’s chief Brexit negotiator, when he is given the EU’s demands.

“I would like to see the UK delegation’s faces when they sit down for the first meeting,” the EU official said. “I think they will walk away immediately. Which is dangerous, because once you walk away, you need a major concession to come back to the table and we are simply not able to provide any.”

Asked whether he would leave the meeting, the senior Cabinet minister said: “Wait and see”. But he predicted the talks would be “fairly turbulent”.

Meanwhile, speaking to the Sunday Telegraph, May said Brussels must cough up its own obligations to Britain for the UK’s share of the European Investment Bank and other joint projects.

“There is much debate about what the UK’s obligations might be or indeed what our rights might be in terms of money being paid in the past. We make it clear that we would look at both those rights and obligations,” she said.