The European Parliament has rejected Britain's brand-new offer on the rights of EU citizens living in the UK after Brexit.

The Government yesterday released a technical paper spelling out the details of a two-year grace period for EU nationals to apply for settled status once the UK leaves the bloc so that they can continue their lives in the UK.

The Parliament's cross-party Brexit steering group however today said there were still "major issues" to be resolved while Brexit coordinator Guy Verhofstadt criticised the "inadequate" proposal.

David Davis: "We will look at" plans for Brits to keep EU citizenship after Brexit

The rebuttal comes less than 24 hours before the resumption of the next round of Brussels talks between David Davis and Michel Barniers' teams, in negotiations that will be key to Britain moving to trade talks before its new December deadline.

"EU citizens in the UK and UK citizens in the EU were told that nothing would change because of Brexit. The fact that the UK Government needs 25 paragraphs to explain how they lives will change proves this was a fabrication," the European Parliament’s Brexit coordinator Guy Verhofstadt told The Independent.

"It's hard to believe this proposed new system will be smooth and efficient. The European Parliament remains deeply concerned about the lack of progress on citizens' rights issues. It is erroneous to say a deal is 'within touching distance'."

The UK said on Tuesday it would make the process of applying for settled status as seamless as possible, cost no more than an application for a UK passport, and that anyone rejected would be subject to an appeal. It also said the conditions for obtaining settled status would be enshrined in the withdrawal agreement negotiated with the EU.

In a joint statement issued on Wednesday the Parliament’s Brexit steering group, which draws on MEPs from around Europe and across party lines, however said that settled status had to be an “automatic process” without any conditionality such as the criminal background checks demanded by the UK.

The MEPs also said families should be able to make a single joint declaration, that the burden of proof should be on the UK authorities to challenge anyone’s right to remain, and that it should be cost-free.

Guy Verhofstadt speaking at the European Parliament (European Parliament)

Additionally, this system should also only come into force after the transition period sought by Theresa May rather than immediately after Britain leaves the EU in March 2019, the group said.

The European Parliament will have a veto on any final deal, which will be put to a vote on the floor of the house.

Some campaigners for EU citizens' rights, such as the 3million group, reject any proposal for "settled status" and say that EU citizens should retain permanent residence as now.

Brexit: the deciders Show all 8 1 /8 Brexit: the deciders Brexit: the deciders European Union's chief Brexit negotiator, Michel Barnier Getty Brexit: the deciders French President Emmanuel Macron Getty Brexit: the deciders German Chancellor Angela Merkel Reuters Brexit: the deciders Commission President Jean-Claude Juncker EPA Brexit: the deciders The European Parliament's chief Brexit negotiator Guy Verhofstadt Getty Brexit: the deciders Britain's Prime Minister Theresa May Getty Images Brexit: the deciders Britain's Chancellor of the Exchequer, Philip Hammond PA Brexit: the deciders After the first and second appointed Brexit secretaries resigned (David Davis and Dominic Raab respectively), Stephen Barclay is currently heading up the position PA

Yesterday Brexit Secretary David Davis said the UK “will support everyone wishing to stay to gain settled status through a new straightforward, streamlined system”.

He added: “The last negotiation round saw real progress in this area and I hope the document we have published today can facilitate the deal we need to guarantee the rights of UK citizens living in the EU27, and vice versa.”

A Government spokesperson said: "The UK has made a fair and serious offer on citizens' rights and we will continue working with the EU to finalise an agreement. At the latest round of negotiations, we made real progress on issues which will have a significant impact on people’s lives.