European Council President Donald Tusk has rejected Theresa May's Brexit plans as "pure illusion", ruling out the vision the prime minister fought hard to unite her divided Cabinet behind in Chequers.

He dismissed the flagship idea of "managed divergence" from EU law after Brexit, which is also known as the "three baskets" plan, as proof that the British still wanted, as Boris Johnson once said, to have their cake and eat it too.

"I am glad the UK government seems to be moving towards a more detailed position. However if the media reports are correct, I am afraid the UK position today is based on pure illusion," said Mr Tusk after a summit of the EU-27 in Brussels on Friday.

"It looks like the cake philosophy is still alive. From the very start it has been a key principle of the EU-27 that there can be no cherry picking or single market a la carte," he told reporters at a press conference with Jean-Claude Juncker.

Mr Tusk warned that the EU would adopt Brexit guidelines at the March 22 European Council summit, whether Britain had put forward its vision of the future UK-EU relationship or not.

He said: "Our intention is to adopt these guidelines whether the UK is ready with its vision of our future relations or not. Naturally it would be much better if it were but we cannot stand by and wait," he said.