German Chancellor Angela Merkel’s senior adviser has warned that Theresa May’s proposed Brexit plan is impossible.

Ms May used a speech on Tuesday to tell international leaders that she would take the UK out of the single market, but still wanted to negotiate access to it.

Yet German politician Michael Fuchs said the Conservative's plan was "not possible" because "you can't eat a cake without paying for it".

The Prime Minister has said the UK is prepared to default to World Trade Organisation rules if the EU does not cut a favourable agreement for Britain during Brexit negotiations, claiming: “no deal for Britain is better than a bad deal”.

But Mr Fuchs told Sky News: "I did not really get it out of this speech that she wants to give up something.

"It was a little bit like cherry picking. So to speak: you can’t eat a cake without paying for it."

Responding to Ms May's speech, Ms Merkel cautiously welcomed the fact that London had accepted that free movement of EU citizens was not something it could opt out of without losing other EU rights.

"There cannot be any cherry picking by Britain in Brexit negotiations," she told an economic conference, adding that access to the bloc's single market was ultimately linked to accepting the EU's four freedoms - of movement of goods, capital, people and services.

"The speech made by British Prime Minister Theresa May has given us a clear impression of how Great Britain wants to proceed.

"The main thing is that Europe does not let itself be divided and we will make sure of that via very intensive dialogue," she added.

Ms May had suggested Britain would prefer to retain a form of "associate membership" of the union, which would limit red tape for businesses who export to continental Europe

Theresa May's Brexit speech - five key points

Mr Fuchs added: "Look at the situation with Switzerland and Norway, at the moment they pay quite a lot money – actually, more than the UK per capita – to the EU and Britain doesn’t want to do anything. I think this is not possible.

“We have four freedoms and this is not negotiable – if you have one of them and you don’t want it, it is not possible because I call it cherry picking.”

The German economic adviser is the latest to discredit the proposals, which have been branded unrealistic by European leaders and business chiefs alike.

Supreme Court Brexit Challenge Show all 13 1 /13 Supreme Court Brexit Challenge Supreme Court Brexit Challenge People wait to enter the public gallery outside the Supreme Court ahead of the challenge against a court ruling that Theresa May's government requires parliamentary approval to start the process of leaving the European Union, in Parliament Square, central London Reuters Supreme Court Brexit Challenge Gina Miller, co-founder of investment fund SCM Private arrives at the Supreme court in London on the first day of a four-day hearing Getty Supreme Court Brexit Challenge A man waves the EU flag in front of the Supreme Court Getty Supreme Court Brexit Challenge Satirical artist Kaya Mar poses with two of his paintings in front of the Supreme Court Getty Supreme Court Brexit Challenge Pro-Europe protestors dressed as Supreme Court Justices stand outside the Supreme Court ahead of the first day of a hearing into whether Parliament's consent is required before the Brexit process can begin. The eleven Supreme Court Justices will hear the government's appeal, following the High Court's recent decision that only Parliament can trigger Article 50 Getty Supreme Court Brexit Challenge The eleven Supreme Court Justices will hear the government's appeal, following the High Court's recent decision that only Parliament can trigger Article 50 Getty Supreme Court Brexit Challenge Businesswoman Gina Miller arrives at the Supreme Court ahead of the first day of a hearing into whether Parliament's consent is required before the Brexit process can begin Getty Supreme Court Brexit Challenge Attorney General Jeremy Wright arrives at the Supreme Court in London EPA Supreme Court Brexit Challenge Protesters outside the Supreme Court in London, where the Government is appealing against a ruling that the Prime Minister must seek MPs' approval to trigger the process of taking Britain out of the European Union PA wire Supreme Court Brexit Challenge A protesters wearing a judge's wigs and robes stands outside the Supreme Court ahead of the challenge against a court ruling that Theresa May's government requires parliamentary approval to start the process of leaving the European Union, in Parliament Square, central London Reuters Supreme Court Brexit Challenge A protester holds up a placard outside the Supreme Court ahead of the challenge against a court ruling that Theresa May's government requires parliamentary approval to start the process of leaving the European Union, in Parliament Square, central London Reuters Supreme Court Brexit Challenge Pro-Europe protestors dressed as Supreme Court Justices stand outside the Supreme Court Getty Supreme Court Brexit Challenge A man waiting to enter the public gallery waves a European Union flag outside the Supreme Court ahead of the challenge against a court ruling that Theresa May's government requires parliamentary approval to start the process of leaving the European Union, in Parliament Square, central London Reuters

The European Parliament's appointee to lead Brexit negotiations said on Tuesday Ms May was creating an "illusion" with her Brexit proposals.

Guy Verhofstadt, a former Prime Minister of Belgium, said: “I think it creates an illusion that you can go out of the single market and the customs union and you can cherry pick and still have a number of advantages,” Mr Verhofstadt said.

“I think this will not happen. We shall never accept a situation in which it is better to be outside the single market than be a member of the European union."