Ministers are looking at creating a new body to oversee EU citizens' rights in the UK in an effort to break the impasse over whose courts protect EU nationals after Brexit.

A Government source told Sky News that a new oversight body for EU citizens was shaping up as a "serious option" in a bid to find a compromise between the European Commission and the UK over who should protect EU citizens living in the UK.

The issue of legal oversight has become a sticking point in negotiations, with Theresa May rejecting the EU's position that the European Court of Justice should be the arbiter of any future disputes over citizens' rights.

Michel Barnier, the EU's chief negotiator, has consistently said he expects the ECJ to enforce the rights of EU citizens in Britain, saying last month that "the rights in the withdrawal agreement will need to be directly enforceable and the jurisdiction of the European Court of Justice maintained".

However, the Prime Minister has explicitly rejected that demand, saying in her offer document to EU citizens living in the UK that the ECJ "will not have jurisdiction in the UK" after Brexit.


May tells EU citizens: 'We want you to stay'

The rights of citizens and the UK's exit fees are key areas of the divorce settlement that the EU wants to resolve before talks can begin on the future trade deal between Britain and its largest trading partner.

Britain wants an early breakthrough on citizens' rights so it can move onto the next stage of talks.

However, the detailed proposals published on Monday had provoked a cool response, with Mr Barnier tweeting that the goal on EU citizens' rights was to have the "same level of protection as in EU law. More ambition, clarity and guarantees needed that in today's position".

Government sources told Sky News that "a separate oversight body is a real option" given that the Prime Minister and her cabinet "can't budge on the ECJ binding jurisdiction as it doesn't deliver sovereignty".

Two other figures familiar with the discussions also suggested a separate oversight body could be an option, acknowledging that the two sides would have to find some sort of compromise on oversight of citizens.

"This is a negotiation," said the figure.

Analysis: PM's plan for EU nationals living in the UK after Brexit

"We have always been explicit that we want to safeguard the rights of EU citizens living in the UK," said a source in the Department for Exiting the European Union.

"It is only to be expected that we will keep our options as to how we do that. But we have always been clear that once we leave the European Union the jurisdiction of the ECJ in the UK will end."

Another bone of contention is the post-Brexit rights of EU citizens.

The European Commission has demanded that EU citizens living in UK have the right to be joined by family members after Brexit.

However, Mrs May on Monday rejected this demand, insisting EU citizens must bring family members over to Britain before Brexit or face tougher immigration rules.