Customs controls on the Border are likely to return when the UK leaves the European Union, after British prime minister Theresa May said she wants to take the UK out of key parts of the EU customs union.

However, Ms May promised to work with the Government to make such controls as “frictionless” as possible and identified the retaining of the Common Travel Area (CTA) between Britain and Ireland as a key objective in her negotiations with the EU.

In a keynote speech on Brexit to foreign diplomats at Lancaster House in London, Ms May confirmed that the UK would leave the single market after Brexit and ruled out full membership of the customs union.

“I want Britain to be able to negotiate its own trade agreements. But I also want tariff-free trade with Europe and cross-border trade there to be as frictionless as possible.

“That means I do not want Britain to be part of the Common Commercial Policy and I do not want us to be bound by the Common External Tariff,” she said.

Ms May restated her commitment to avoiding a return to “the Borders of the past” in Ireland, while Downing Street said the UK would seek to make any customs controls as unintrusive as possible.

In the speech, Ms May identified maintaining the CTA as one of the UK’s 12 key objectives in the Brexit negotiations.

“The family ties and bonds of affection that unite our two countries mean that there will always be a special relationship between us.

“So we will work to deliver a practical solution that allows the maintenance of the Common Travel Area with the Republic, while protecting the integrity of the UK’s immigration system,” she said.

Irish reaction

Ms May’s speech was received warmly in Dublin, as the maintenance of the CTA is one of the Government’s main concerns.

Taoiseach Enda Kenny had stressed Ireland’s Brexit concerns in a phonecall with Ms May on Monday evening .

In a statement issued after Ms May’s speech, the Government said that it welcomed the “clarity” that it has brought.

“Prime minister May has made clear that she wishes to secure the closest possible future economic relationship for Britain with the EU, a goal that Ireland shares,” the Government said.

Privately, Ministers and senior officials were more cautious about the speech, welcoming the explicit statement about the CTA but expressing some apprehension at the increasing likelihood that the UK will now leave the EU’s customs union.

Such a move would raise the prospect of tariffs on Irish goods crossing the Border into the UK in the absence of an agreement between the EU and the UK for tariff-free trade.

“That’s a big worry,” said one Cabinet Minister.

Irish business groups also expressed concern over Ms May’s decision to seek a clean break with the EU.

Ibec chief executive Danny McCoy said the UK leaving the customs union could disrupt trade between Northern Ireland and the Republic, and deeply damage British-Irish economic relations.

“The possibility of the UK leaving both the single market and the customs union raises fundamental questions about Ireland’s future trading relations with the UK,” he said.

“This is an aggressive move by the UK, showing little regard for our trading relationship and for relations with other EU member states.”

The British prime minister said that, although the UK was leaving the single market, she wanted a new trade agreement with the EU which would provide “the greatest possible access” to the single market.

However, German chancellor Angela Merkel made it clear following the speech that there could be no “cherry-picking”, whereby Britain could enjoy the benefits of the single market without its obligations.

“The single market will soon be endangered if it emerges that you can get full access even by picking certain things out,” she said.

European Council president Donald Tusk said Ms May’s speech was “at least more realistic” about what the UK wanted.

The European Parliament’s chief Brexit negotiator, Guy Verhofstadt, was more sceptical.

“It creates also an illusion, an illusion that you can go out of the single market, that you can go out of customs union and that you can cherry-pick, that you can still have a number of advantages, and I think that will not happen,” he said.

“We shall never accept a situation in which it is better to be outside the EU, outside the single market, than to be a member of the EU.”

Parliament vote

In the speech, Ms May said the final exit deal would be put to a vote in both houses of parliament.

That promise helped revive the pound on currency markets. Sterling, which has traded at the lowest levels against the US dollar for more than three decades, rose during Ms May’s speech, hitting a day high.

Her announcement of the vote comes ahead of a court decision on whether she has the power to start the Brexit process without parliamentary approval.

She has said she plans to launch the two-year negotiation process by the end of March.

The Brexit talks, expected to be one of the most complicated negotiations in post-second World War European history, could decide the fate of Ms May’s premiership, the UK and the future shape of the EU that it leaves behind.