The European Commission briefing given to top EU Brexit officials on July 5 this year was political dynamite, driving a coach and horses through a fundamental part of Britain’s expected negotiating strategy.

Delivered by Michel Barnier’s top economic adviser on the eve of the crunch Chequers summit, the European Commission laid out what it saw as the hard economic arguments against allowing the UK to remain in the EU single market for goods only.

Citing detailed examples from cars to chemicals, sources briefed on the meeting say that Stephanie Riso explained why European Commission economists believed accepting the British plan would do real damage to the EU single market.

The presentation, which preceded Chequers and the subsequent White Paper, went to the heart of the British pitch to align tightly with EU rules on goods, while remaining free to diverge on services.

The slides warned that allowing this request would leave the UK free to seek a competitive advantage that, over time, would cost the EU dearly.

On cars, Ms Riso argued that 20-40 per cent of the value of a vehicle was in information technology, research and development, financial services and distribution - all areas where the UK could potentially undercut the EU.