Lashing out the European Commission, the Brexit Secretary said he regarded the legal document from Brussels – published this week – as "unwise" and a “political document”.

The draft text from Brussels said that EU leaders had requested a mechanism to “suspend certain benefits” including “participation in the single market” if the UK breaches the bloc’s laws and regulations during the two-year transition period.

Brexiteers were outraged by the leak of the document, fearing that Britain will become a “vassal state” after formally leaving the EU in March 2019.

But referring to the papers after a crucial meeting of Theresa May’s 11-member Brexit cabinet, Mr Davis said: “This document was hardly a legal document, it was a political document. What we’re about, is building an implementation period, which is to build a bridge to a future where we work well together.

"And I do not think it was in good faith to publish a document with frankly discourteous language, and actually implying that they could arbitrarily terminate, in effect, the implementation period. That’s not what the aim of this exercise, it’s not in good faith, and we think unwise to publish that.”

His intervention, however, comes after Whitehall attempted to play down the significance of the EU text, insisting it would form the basis for a negotiation.

And on Wednesday, Stefaan De Rynck, an adviser to EU chief negotiator Michel Barnier, said sanctions for UK breaches of Brussels rules during the transition “of course” had to be part of any deal.

Mr Davis added that “a lot of things” had been resolved in the Government’s Brexit meeting on Thursday, claiming the atmosphere was “very constructive”.

What is the Brexit 'transition'?

“I’m not going to give you a detailed blow-by-blow of a cabinet committee - that obviously never happens,” he said.