Theresa May has blamed the media for misrepresenting her words on Brexit leading to a slump in the pound.

Sterling dropped more than one per cent against the dollar and euro following stories that the Prime Minister is planning a hard Brexit which tears the UK out of the EU’s single market.

Asked whether the money markets were "getting it wrong" in reacting negatively to her approach, she said: "I am tempted to say that the people who are getting it wrong are those who print things saying I’m talking about a hard Brexit, [or] it is absolutely inevitable it is a hard Brexit.

"I don’t accept the terms soft and hard Brexit."

She added: "What we are doing is going to get an ambitious, good and best possible deal for the United Kingdom in terms of trading with and operating within the European single market."

The outburst came after an interview with Sky News in which she repeated equivocal comments about her approach to Brexit, border controls and the single market.

Asked in the interview if she would prioritise immigration controls over single-market access, Ms May said: "We are leaving, we are coming out, we are not going to be a member of the EU any longer.

"We will have control of our borders, control of our laws, but we still want the best possible deal for UK companies to trade with and operate within the European Union and also European companies to trade with and operate within the UK."

She then repeated similar comments she had made in December that people should not "think about this as somehow we're coming out of membership but we want to keep bits of membership".

Theresa May avoids directly answering four questions in a row on Brexit

Her words led some papers to report stories under headlines like "Goodbye to the Single Market" after which the pound dropped to $1.214 and to €1.153.

Asked later whether Ms May's answers were not clear enough, a Downing Street spokesman later said: "This is going to be a complex negotiation and the Prime Minister is perfectly within her rights to approach these issues in the best way to get the best outcome for the UK."

Ms May has refused to give much real detail of her negotiating position, since telling Tory conference last year that she would in March trigger Article 50 of the Lisbon Treaty, launching official Brexit talks.

Despite being under pressure to say more, she claims any sort of "running commentary" would undermine the UK’s position in negotiations.

She had originally wanted to invoke Article 50 under Royal Prerogative powers, but it looks likely she will be forced to give Parliament a chance to vote on triggering after losing a High Court challenge over the matter.