Former Tory Chancellor Ken Clarke has asked why any country would enter a trade agreement with the UK if Britain insisted on dictating the terms.

The veteran Conservative was speaking during a Commons debate following Prime Minister Theresa May's speech setting out her 12 negotiating objectives for Brexit.

Ms May said the UK would leave the Single Market—though attempt to maintain the "greatest possible access" to it—while forging a "bold" trade deal with the EU and similar new agreements around the world.

The final Brexit deal will be put before Parliament, Ms May promised, but warned European leaders that trying to impose a "punitive" settlement would be "an act of calamitous self-harm" and said "no deal for Britain is better than a bad deal".

To laughter, cries of "More!" and a smattering of applause from the opposition benches, Mr Clarke said: "Which country in the world is going to enter into a trade agreement with this country on the basis that the rules are entirely what the British say they're going to be, on any particular day, and if there's any dispute about the rules it's going to be sorted out by the British Government?"

Brexit Secretary David Davis replied: "Of course there will be agreements between us, and they will be arbitrated by an organisation which we agree between us—not normally the European Court of Justice."

During her speech Ms May talked up "the spirit of goodwill that exists on both sides" even as she asserted the UK's prerogative to respond to any deal that would keep it from accessing the Single Market by changing "the basis of Britain's economic model", including "the freedom to set the competitive tax rates and embrace the policies that would attract the world's best companies and biggest investors".

She warned: "For the EU, it would mean new barriers to trade with one of the biggest economies in the world.

"It would jeopardise investments in Britain by EU companies worth more than half a trillion pounds. It would mean a loss of access for European firms to the financial services of the City of London.

"It would risk exports from the EU to Britain worth around £290 billion every year. And it would disrupt the sophisticated and integrated supply chains upon which many EU companies rely."

Jonathan Portes, economics professor at King's College London, said: "Optimistic references to trade deals with third countries are all very well—but those are a long way off.