Oslo has poured cold water on a proposal from Tory MPs to adopt a Norway-style trading relationship with the EU to break the deadlock over Brexit and the Irish border.

At a press conference in Oslo, Norwegian prime minister Erna Solberg said allowing Britain to become a member of the EEA/Efta trading bloc, which has a very close relationship with the EU, would be "difficult" to accept.

"If you asked us if we would welcome Britain, we would welcome any good cooperation with Britain. But I don't think it's easy to think that you should - I know the British discussion - to enter into an organisation you are preparing to leave at the same time is also a little bit difficult for the rest of us," she said.

The so-called "Norway for Now" option was raised by Conservative MP Nick Boles and would keep the UK in the single market as well as a customs union with the EU.

As this could obviate the need for hard border in Ireland, the proposal has gained cross-party support in Westminster.

In return, the UK would be expected to follow EU rules and send payments to Brussels for a fixed period, and then switch to a more sophisticated trade agreement in the future.

The Telegraph understands that behind the scenes Norway is deeply skeptical towards Britain becoming an EEA/Efta member.

It came as Theresa May insisted that she is not preparing for a general election while addressing EU leaders at a same press conference.

"We are not preparing for another general elections. It wouldn't be in the national interest," the Prime Minister told reporters at the Nordic summit in Oslo.

The Prime Minister had been asked whether her upbeat budget was a signal for an upcoming election.

The focus of the summit will be co-operation between Nordic governments, but with Mrs May in attendance Brexit is likely to be near the top of the agenda.

It is understood that the Prime Minister held bilateral talks with several Nordic and Baltic states, in the hopes of gaining their support for a compromise over the Brexit deal.

Both the UK and EU remain in deadlock over the Irish border, which is the largest obstacle to finalising the Withdrawal Agreement.

The Prime Minister says she cannot accept the EU's backstop proposal for avoiding a hard border after Brexit as it would isolate Northern Ireland from the rest of the UK.

However, both sides privately hope to form a compromise this week that could open the door to a special Brexit summit in mid-November, where the divorce deal would be officially agreed.

In London, Philip Hammond, the Chancellor, suggested today that a Brexit deal could trigger tax cuts and increased public service spending.

Asked what would happen to Monday's announcements if there was no Brexit deal, Mr Hammond told BBC Breakfast: "My Budget stands. The measures I set out yesterday are the right measures for Britain, we will be enacting them in a Finance Bill.