Liam Fox has insisted that Britain will not be "blackmailed" into agreeing on a Brexit divorce bill as the price for starting trade talks.

The International Trade Secretary said it was in the interests of both Britain and the EU to begin talks on the final Brexit deal straight away, after a week in which the two sides reached deadlock over the way forward.

David Davis, the Brexit Secretary, accused Brussels on Thursday of risking the welfare of millions of Europeans because of its dogmatic insistence on agreeing the size of the divorce bill before discussions can begin on a UK-EU trade deal.

There are now serious questions about whether talks on a trade deal will start in October, as originally planned.

Speaking in Japan at the end of a three-day trade mission, Dr Fox told ITV News: "We can't be blackmailed into paying a price on the first part. We think we should begin discussions on the final settlement because that's good for business, and it's good for the prosperity both of the British people and of the rest of the people of the European Union."

Dr Fox added: "I think there is frustration that we have not been able to get on that longer term issue, that we’re stuck on this separation issue and we’re not able to get onto the issues that will matter in the longer term for the future prosperity of the UK and the people of Europe.