Michel Barnier has told EU leaders in Brussels that Britain’s only alternative to a ‘no deal’ Brexit was a Canada-style trading arrangement, using a diagram to prove his point that the UK's red lines made any other outcome impossible.

The European Union’s chief Brexit negotiator has repeatedly insisted that Britain cannot have a bespoke deal and that the future relationship must be based on a pre-existing arrangement between the bloc and a non-EU country.

In the first full Cabinet discussion of the "end state" of Britain's relationship with the EU, Theresa May said a Canada-style deal was not enough.

Mr Barnier's slide, shown to the EU-27 leaders at the summit last week where they judged the UK had made “sufficient progress” in the first phase of Brexit talks, compares different agreements with British red lines to see if they are compatible.

The European Commission's stark conclusion is that Britain must choose between a Canada-style free trade deal with no access for services, opt for a return to WTO rules in a no deal Brexit, or compromise on some of its red lines.