Michel Barnier says so-called ‘divorce bill’ is indivisible from other parts of negotiation and payment is a matter of trust

The European Union has said the Brexit talks could be derailed by an escalating fight over money as it fired back at Boris Johnson for telling the EU leaders to “go whistle” if they expected Britain to pay a divorce bill for withdrawing from the bloc.

“I am not hearing any whistling, just a clock ticking,” said the EU negotiator Michel Barnier at a press conference in Brussels to preview the next round of talks, due to begin on Monday.

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His London counterpart, the Brexit secretary, David Davis, has not yet presented a formal UK position on the scale of any financial settlement when Britain leaves, which some estimates have suggested could be as a high as €100bn.

But EU officials are adamant that failure to at least acknowledge the principle of ongoing budget obligations would prevent talks from proceeding at all and not allow any discussion of future relationship issues such as a free trade deal.

“The three priorities for the first phase are indivisible,” said Barnier, referring to the financial settlement, citizens’ rights and other separation issues such as the Northern Irish border. “Progress on one or two would not be sufficient in order for us to move on to the discussion of our future relationship.”

In some of the most strident exchanges of the Brexit process so far, Barnier said the issue was not simply a technical sequencing matter but went to the heart of whether the two sides could trust each other.

“How do you build a relationship based on trade, security … which is going to last, with a country with which you don’t have trust?” implored the French diplomat. “I am saying this from the bottom of my heart, I want us to build that relationship.”

Play Video 0:33 Boris Johnson: European leaders can ‘go whistle’ over EU divorce bill – video

Questioned in the House of Commons on Tuesday about whether Brussels should be told to “go whistle” for the money – a dismissive suggestion that its demands are futile – Johnson, the foreign secretary, replied: “I think that the sums that I have seen ... seem to me to be extortionate and I think ‘go whistle’ is an entirely appropriate expression.”

“People have used words like ransom,” added Barnier. “It’s not an exit bill, it’s not a punishment, it’s not a revenge, it’s simply settling accounts. It’s not easy and it might be expensive, but we are not asking for a single pound or euro more than they have legally agreed to provide. You can discuss this or that budget line, but they have to start by recognising that they have entered into commitments.”

But money is not the only issue that is threatening to derail the first phase of talks when Barnier and Davis regroup on Monday.

Earlier, the European parliament’s Brexit coordinator, Guy Verhofstadt, revealed that MEPs would also seek a say on whether sufficient progress had been made over Britain’s offer on citizens’ rights.

The parliament is demanding that the UK match existing rights enjoyed by EU citizens living in Britain and say its alternative suggestion of a new “settled status” system would be bureaucratic and unsettling.

“We find that the proposal by the UK is absolutely not what we need,” Verhofstadt told the parliament’s committee on constitutional affairs. “It falls short in respecting the rights that EU nationals have on family reunification, rights to participate in local elections and falls short on simplicity … it creates second-class citizenship for EU nationals.”

Verhofstadt has already threatened to veto the final Brexit deal if citizens’ rights are not maintained but on Wednesday he opened a new front that could complicate efforts by Davis and Barnier to at least reach a temporary compromise on this opening issue.

“In October, the parliament will do an assessment to see if enough progress has been made to go into the second stage,” the Belgian liberal MEP told the committee. “The role of parliament is to scrutinise before the council has taken a decision.”

Domestic political pressure on Davis is also likely to intensify when Labour leader Jeremy Corbyn, Scottish first minister Nicola Sturgeon and Welsh first minister Carwyn Jones all arrive in Brussels for separate, private, talks with Barnier.

The EU’s chief negotiator said it was important he heard from the “differing points of view in the British debate” but insisted he would only negotiate officially with Davis, the UK’s Brexit secretary.

Verhofstad also suggested that after the UK exits the EU those with Irish passports in Northern Ireland should be allowed to vote in European elections across the border.

Verhofstad said the number of European seats could be increased from the current 11 to allow for Northern Irish voters to still exercise some influence in the EU as part of any post-Brexit deal.

The Democratic Unionists in turn said it would use its parliamentary muscle to force the government to block any moves allowing for Northern Ireland voters to elect MEPs in the Irish Republic.

DUP MP Sir Jeffrey Donaldson told the Guardian there was “no chance” his party would accept such an arrangement after Brexit.

Donaldson said the 10 DUP MPs at Westminster who currently shore up the minority Conservative government would insist to the prime minister that Verhostad’s proposal be rejected out of hand in Brexit negotiations.

“His idea would be a breach of the Good Friday agreement which keeps all constitutional change within strand one of that agreement, namely only within Northern Ireland.

“This idea would also upset the delicate constitutional balance we have worked out here and would endanger the peace process,” the Lagan Valley MP added.