Britain needs to “face the reality” of Brexit, the EU’s chief negotiator has said, as he warned Theresa May a withdrawal deal will not be possible unless she backs down over the future jurisdiction of European courts.

Michel Barnier said Britain should not play a “blame game” and try to claim Brussels is responsible for the “negative consequences” of leaving the European Union.

He urged government ministers to come forward with “more realistic proposals”, warning: “A negotiation cannot be a game of hide and seek.”

Mr Barnier said there would be no withdrawal agreement or transition period unless the UK agrees to a continued role for the European Court of Justice in determining disputes involving the UK after Brexit – something Ms May has repeatedly ruled out.

The barbed comments follow a row over the future of British involvement in the EU’s Galileo satellite project. Brussels’ decision to kick the UK out of the scheme was angrily denounced by ministers, with Philip Hammond, the chancellor, vowing to launch a separate satellite initiative if the EU refuses to back down.

Tensions were already running high following days of strained negotiations in Brussels, during which one senior EU source described the UK’s demands as “fantasy”. Mr Hammond dismissed that remark as “not helpful”.

Speaking at a legal conference in Lisbon, Mr Barnier noted the importance of agreeing how the relationship between the UK and the EU will be governed once Britain leaves the bloc.

He said: “We have probably made a lot of progress on the substance of the withdrawal agreement, but without effective governance, these gains will be of limited value.

“Because without agreement on governance, and without an agreement on Ireland and Northern Ireland, there will be no withdrawal agreement, and therefore no transition period.

“The United Kingdom is well aware that our citizens and businesses, on both sides of the Channel, need legal certainty.”

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Hinting at continued frustration in Brussels over a perceived lack of detail in the UK’s negotiating demands, Mr Barnier urged ministers to be more “realistic” and warned them against playing a ‘blame game” with the EU.

He said: “We also want an ambitious partnership with the United Kingdom in the long term. But to achieve this, we need realistic proposals from the UK – proposals that respect the institutional architecture and the integrity of the European Union.

“I can see the temptation of the blame game to bring the negative consequences of Brexit on the European Union. But we will not be impressed. I will not be impressed.”

He added: “For the economy, for foreign policy, the best way to influence the decisions of the European Union is to be in the European Union. The United Kingdom wants to leave. It’s its decision. Not ours. And that has consequences.

“The United Kingdom must look at the reality of the European Union in the face. It must also face the reality of Brexit.”

Michel Barnier says a solution must be found to avoid a hard border in Northern Ireland

The EU and the UK are at loggerheads over how disputes will be settled after Brexit. Britain wants to establish a joint committee, with members appointed by political leaders, to resolve any issues that arise, but European leaders have insisted the ECJ must be given the final say.

Ms May has previously insisted: “The jurisdiction of the ECJ in the UK must end.”

In a sign of the continued distance between the two negotiating teams, Mr Barnier said: “We cannot accept that a jurisdiction other that the Court of Justice of the European Union determines the law and imposes its interpretation on the institutions of the Union.”

The former French minister said the EU was open to the UK changing its stance, but that time was running out.

He said: “If the United Kingdom would like to change its own red lines, it must tell us. The sooner the better.