UK Prime Minister Theresa May had previously said the UK would leave on Brexit Day but, instead, two transition years will follow. Credit:Bloomberg "As you know, the UK has asked for a transition of about two years, while remaining part of the Single Market and Customs Union," Tusk said. "And we will be ready to discuss this, but naturally, we have our conditions." UK Prime Minister Theresa May and her ministers have previously insisted that Britain would leave both institutions on Brexit day. In a statement to parliament in October, May said: "As we leave the European Union in March 2019 we will leave full membership of the Customs Union and full membership of the Single Market." She could argue the UK will no longer have 'full membership' because it cannot set the rules, but that explanation would likely not be well received.

Eurosceptics called the divorce deal a a betrayal of Brexit and an embarrassment for the UK. Credit:Bloomberg In a sobering speech shortly after the divorce deal was announced, Tusk said he was satisfied with progress on the divorce deal but "the most difficult challenge is still ahead". "We all know that breaking up is hard, but breaking up and building a new relationship is much harder," Tusk said. "Since the Brexit referendum, a year and a half has passed. "So much time has been devoted to the easier part of the task. And now, to negotiate a transition arrangement and the framework for our future relationship, we have de facto less than a year." The document, circulated to European leaders on Friday, is the EU's draft of guidelines for the second phase of negotiations.

Tusk said the EU was ready to start preparing a close EU-UK partnership in trade, in the fight against terrorism and international crime as well as security, defence and foreign policy. Whitehall insiders said they would not be taking a celebratory holiday now that the first stage of Brexit is done, but would be hard at work nailing down the transition arrangements. UK-based businesses, including big corporations in the City of London, have made it clear to May that there must be clarity on the transition by March 2018, a year ahead of Brexit day. Otherwise they will not be able to plan for the year ahead, and could activate contingency plans to move operations and staff to the continent. Reaction to the divorce deal struck in the early hours of Friday morning was mixed, with hardcore eurosceptics calling it a betrayal of Brexit.

Former UKIP leader Nigel Farage said the "very bad deal" was a humiliating capitulation, and the UK had met every one of the EU's demands. "We collapsed at every level," he said, saying it would be at least six years after the Brexit vote before the UK was able to make a trade deal with any other part of the world. "We look like mugs," he said. "We wasted months and months and in the end we agreed to all the things the Commission insisted upon." When asked for an example of where the EU had given ground, chief negotiator Michel Barnier said he was not "at this stage insisting the UK should repay the removal costs" for EU agencies leaving London. Under the deal, Britain will pay a financial settlement for outstanding debts and obligations, calculated and paid over time - and estimated in the media at about between £35 billion ($62 billion) and £40 billion.

European Commission president Jean-Claude Juncker called the agreement "the breakthrough we needed" allowing the two sides to begin discussions on crucial future trade and customs arrangements. May, who may have saved her job by getting the deal done, said it had required "give and take from both sides". The Democratic Unionist Party, who scuppered a draft deal on Monday because they were concerned it would divide Northern Ireland from the rest of the UK, have cautiously accepted the new version, saying there was "more work to be done". Their leader, Arlene Foster, said they had run out of time to go through the details of the agreement, and May had decided to go to Brussels anyway in the national interest. DUP support in Westminster is vital for May's minority government.