European Union negotiators have adopted a three-tier approach with the UK for the Article 50 negotiations expected to start next year.

Sky News has been told that Michel Barnier, the European Commission's top Brexit negotiator, wants to discuss "pending issues" - such as UK payments to the EU, border issues and the single market - at the same time as considering a post-Brexit transition deal.

Under the EU's plan, a "final deal" or "association agreement" for any long-term trade relationship - the third tier - would only be discussed after these first two stages have been agreed.

Image: Michel Barnier wants to discuss the EU-UK future relationship separately

It will come as a blow to UK Brexit Secretary David Davis, who told counterparts in Brussels this week that Britain wanted to agree the final deal within the negotiation period for the first two - what has come to be known as "parallelism".

And when questioned this week about the possibility of a transition deal, Theresa May said: "People don't want a cliff-edge, they want to know with some certainty how things are going to go forward."


Sources in EU capitals are working on the assumption that the "crux of the negotiations" will occur in the fourth quarter of 2018.

David Davis faces questions from MEPs in Strasbourg about the UK's divorce from the EU

However, there is some expectation the UK will not be in a position to trigger Article 50 by the end of March as planned, due to legal hurdles.

Theresa May told Belgian PM Charles Michel this week that she "intends to" trigger Article 50 then.

Number 10 today denied that this statement was a watering down of her declaration last month that it "will be" triggered by March.

While the EU-27 have stayed firmly behind the Barnier strategy of "no notification, no negotiation", there are some signs of a difference in emphasis between the European Commission and Council.

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The Commission is seen as wanting to cut the UK out of discussions about the future of the EU, including preparations for a "Rome Declaration" on the institution's 60th anniversary summit in Italy in March.

The European Council is understood to have confirmed that as long it remains a member, legally the UK still has all the rights and responsibilities to attend meetings.

Sky News revealed that Mrs May had intervened last month at the start of her first EU summit, to complain that she had to sign off on discussions which took place without the UK at a special summit in Bratislava.

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It is now understood that EU sources are open to the idea of Mrs May attending what was intended as a second EU-27 summit in Malta in February.

Brussels sources said they doubted the UK would want to attend, but confirmed that it could do, if it wanted.

A spokesman for the Department for Exiting the EU said: "There is no benefit to Britain in providing a running commentary on every twist and turn ahead of negotiations - that will not help us secure a good deal for Britain.

"We're preparing for a smooth and orderly exit from the EU which is why the Secretary of State recently visited Brussels and Strasbourg to signal his determination to approach the negotiations in a spirit of goodwill and to seek a positive outcome for both the UK and the EU.

"The structure of negotiations is to be determined."