The British government has been accused of failing to protect the rights of British and EU citizens in the event of a no-deal Brexit, as Michel Barnier reiterated that he would not renegotiate the agreement currently on the table.

Amid demands in Westminster for the prime minister to be sent back to Brussels to seek more concessions from the EU, the bloc’s chief negotiator told a conference of regional leaders: “I must say once again today, calmly and clearly, it is the only and best possible agreement.”

Barnier said: “Everybody needs to do their bit, everybody needs to take on the responsibility. The British parliament will be voting on this in the next few days. This has serious implications for the future of the country.”

He said a no-deal Brexit remained a possibility, and urged regional leaders and business to speed up their preparations for such an outcome.

A Home Office plan for EU citizens’ rights in the UK after a no-deal Brexit, published on Thursday, has been criticised for letting down both EU citizens living in the UK and British citizens on the continent.

The European parliament’s Brexit coordinator, Guy Verhofstadt, a former prime minister of Belgium, said the offer was a “watered-down” version of the terms agreed in the withdrawal agreement.

He said: “EU and UK citizens cannot be the victims of a no-deal Brexit, nor used as bargaining chips in the Brexit negotiations. In the case of no deal, the European parliament and I have been clear that we want the citizens’ rights deal that has been provisionally agreed to be ringfenced and the EU must honour this. The citizens’ rights deal shouldn’t be watered down as the UK has today proposed.”

EU leaders have previously said the manner in which the British government treats their citizens will be reflected in the hurdles that face UK nationals living on the continent.

The settled status scheme envisioned in the withdrawal agreement, under which the government would allow those already in the country to stay and enjoy similar rights to those they have today, is still the basis of the UK’s offer in the event of Britain leaving the UK without a deal.

But it will only apply to EU nationals who arrive before 29 March 2019, rather than the end of 2020 when the transition period assumed in the withdrawal agreement would come to an end. There would be an earlier deadline for applications, of 31 December 2020 rather than 30 June 2021, and there would be no right of appeal for applicants.

People convicted of minor crimes could also be more easily deported. The document states that the EU deportation threshold would continue to apply to crimes committed before exit but the government would apply the UK deportation threshold to crimes committed after 29 March 2019.

It would also be harder for non-EU family members to join their loved ones in the UK, as the cut-off will be brought in for 29 March 2022.

Nicolas Hatton, a co-founder of the3million, a lobby group for EU nationals in the UK, described the proposal as “shameful”.

He said: “By watering down the rights of EU citizens in case of no-deal Brexit, Theresa May is again using EU citizens as bargaining chips, this time with MPs in order to pass her deal through parliament, after using us as bargaining chip with the EU in the Brexit negotiations.”

EU leaders have no intention of reopening negotiations with May at next week’s council summit if she loses the Brexit vote next Tuesday, sources have insisted.

Foreign ministers from EU member states will gather on Monday to discuss a “holding statement” to be issued on Tuesday night in the event of a defeat for the prime minister.

This will not involve any shift in the current position that the alternative to the deal on the table is no deal. “Our plan is there is no plan beyond this,” a source said.

Brussels is expected then to announce it will step up its no-deal planning, with one political source saying some countries, including France and Germany, appear to have an appetite for “two or three weeks of chaos” after 29 March to show that the EU will go the final mile to protect the bloc and to force Britain back to the table.

At the conference of regional leaders in Brussels, Barnier stressed that the deal being offered could develop in the transition period into something that would suit those who are calling for the government to pivot towards a “Norway-plus” model.

Under that relationship, the UK would have membership of the European Economic Area and the European Free Trade Association, offering single market access, and a permanent customs union.