Brussels is increasingly likely to cut off Swiss stock exchanges from the EU's single market to send a “warning shot” to Bern but also to Brexit Britain.

Internal documents revealed that the European Commission is prepared to take a hard line with Switzerland to send a “crystal-clear” message to Britain that the EU is not prepared to compromise on its single market rules.

“We simply cannot accept further attempts at foot-dragging and watering down internal market rules, especially in what is probably the decisive phase regarding Brexit,” a document presented to today’s weekly meeting of all 28 EU commissioners read.

Swiss access to the EU’s single market is governed by a system of ‘equivalence’, which can be withdrawn by the commission. The equivalence expires at the end of June, unless it is renewed.

The commission has said it will only renew if Bern made progress towards agreeing an overall EU-Swiss agreement, which would replace the current patchwork of individual deals governing the relationship between Switzerland and the bloc.

The commission document, which was discussed before a final decision will be made, said, "An expiry of the ‘equivalence’ may be just the warning shot across the bow they need.”

Today in Brussels, with two weeks before the deadline, the commission said not enough progress was being made after Bern had asked for clarifications on protecting Swiss wages, regulating state aid, and spelling out citizens’ rights.