As plans are set in motion for the UK's break from the EU, the "safest way out" is to become a member of the European Economic Area (EEA), a free market think tank has said as a British trade deal could take years.

The Adam Smith Institute (ASI) has said that a sharp break from the EU would be "very bad for British exporters, and really would threaten jobs", adding that a unique trade deal with the UK "will take many years" to agree upon.

The think tank says that the UK should follow the example of countries like Iceland and Norway which are part of the EEA, allowing Britain to trade with the EU as normal and continue to have freedom of movement for the next five years before a British deal can be arranged.

Read more: British voters want a Norway-style arrangement if the UK votes for Brexit

Joining the EEA would mean the UK keeps access to the single market, cuts its contribution to the EU budget and is no longer required to work with the EU on justice, home affairs and defence policies, according to the ASI.

Sam Bowman, executive director at the ASI, said: "That does mean that freedom of movement has to continue, but under current EEA rules we get an emergency brake to control things when there's trouble."

Read more: The Norway option is far from just paying into the EU without having a say

The same view was echoed by foreign secretary Philip Hammond. Speaking to ITV's Peston on Sunday, Hammond said it would be "catastrophic" if the UK lost access to the single market, adding: "We will not be able to negotiate control of migration from the EU and at the same time full access to single market."

Vote Leave has been contacted for comment.