After leaked papers revealed the European Union (EU) is plotting to take the UK to court to extract a £50 million ‘divorce bill’, Whitehall sources have indicated the UK could hit back with trade tariffs.

A draft copy of the EU’s negotiating strategy, seen by Dutch newspaper De Volkskrant Tuesday, insists Britain could be taken to the International Court of Justice in The Hague.

It quotes an official as saying that if Britain refuses to pay, “in that case it is, see you in The Hague!”

In February, it emerged that the EU’s chief Brexit negotiator Michel Barnier was plotting to ban talks on a future trade deal and the legal status of expats until the government responds to his demands to pay the huge sum.

Over the weekend, the president of the European Commission said Britain would be treated like a “third country”, and he wanted Brexit to be so bad for the UK it will deter other states from leaving.

“There will be no half-membership or cherry picking. In Europe, the choice is to eat what’s on the table or not come to the table at all,” Jean-Claude Juncker said.

However, government lawyers and a House of Lords committee has said the UK has no legal responsibility to pay the £50 billion bill and the Prime Minister is opposed to handing over a large amount.

“Let me be clear: No deal is better for Britain than a bad deal,” warned Theresa May in January.

Now, it has emerged that Mrs. May could be prepared to slap tariffs on EU goods if European leaders continue to be difficult over Brexit.

According to The Sun, a new trade bill, setting out a new law to take back control of trade policy, is expected to coincide with the start of Brexit negotiations this summer.

Currently, Brussels negotiates trade deals and collects tariffs on behalf of Britain, but this new law will transfer that power back to Westminster.

It would send a strong message to the EU that the UK is prepared to walk away from talks without a new trade deal.

A Whitehall source told the newspaper: “There are a number of decisions that need to be taken, but all options are still being considered.”

Meanwhile, Chancellor of the Exchequer Philip Hammond has indicated the UK could pay the bill, saying: “…if we do have any bills that fall to be paid we’ll obviously deal with them in the proper way.”

One senior government source slapped him down yesterday, telling The Times: “As the prime minister said, we do not want to pay huge sums. We think anything over £2 billion or £3 billion is not possible.

“There are those round the cabinet table who think we are going to have to pay a huge amount to get out, and the chancellor is on that side.”

Another cabinet source said: “We are categorically against paying in a big lump sum. Nor do they want it agreed before trade negotiations. People are horrified by the chancellor’s suggestion of paying the bills that are owed.”