The UK's Brexit trade deal with the EU will not be finalised before exit day, Guy Verhofstadt has warned.

Instead there will be an "annex" inside the withdrawal agreement which will set out what a future relationship might look like, to be thrashed out during the transitional period while current rules remain in place.

The Prime Minister has previously ruled out such a situation, stating instead that a new trade deal must be agreed while negotiations to leave the union take place so the UK can be ready to forge new trade deals around the world in 2019.

The European Parliament's Brexit coordinator also warned that the right of EU citizens to move freely must remain throughout the interim period, despite Theresa May's pledge that anyone coming to the UK after Brexit would be subject to a new arrangement.

And he said that if British MPs veto the final agreement between the two sides it could lead to a political collapse, another general election and possibly a new Government.