EU leaders will consider giving Theresa May a Brexit extension until the end of the year at a crunch summit in Brussels on Wednesday that could delay Britain’s departure from the bloc until after Christmas.

Ahead of the crucial meeting the prime minister was warned that she needed “a clear plan with credible political backing” if she wanted the delay to avert no deal on Friday, as she met with Angela Merkel and Emmanuel Macron to try and win their support.

But there is still debate among the 27 EU countries about what sort of conditions any extension should come with – with talks between ministers in Luxembourg on Tuesday running over by an hour amid debate among countries.

“The prolongation of the Article 50 deadline is an instrument and not an objective in itself. The British side must outline a clear plan with credible political backing to justify the decision of the European Council in favour of the extension,” George Ciamba, the Romanian EU minister chairing the meeting said at a press conference afterwards.

The prime minister also faced dissent at home from Tory ministers, with trade secretary Liam Fox warning a customs union – as mooted in talks with Labour – would be “the worst of both worlds”. Minister Andrea Leadsom, a former leadership rival to Ms May, called for the withdrawal agreement to be reopened.

The prime minister’s original request for an Article 50 extension until 30 June is unlikely to be granted, with only a minority of EU member states sympathetic. But diplomats say one proposal gaining momentum behind the scenes is a plan to grant Britain an extension until the end of the year. Such a delay would see the UK participate in European parliament elections at the end of May.

In a letter to EU leaders ahead of the summit European Council president Donald Tusk warned that "our experience so far, as well as the deep divisions within the House of Commons, give us little reason to believe that the ratification process can be completed by the end of June". He suggested instead that an "alternative, longer" extension should be discussed by leaders.

"In reality, granting such [a short] extension would increase the risk of a rolling series of short extensions and emergency summits, creating new cliff-edge dates," he wrote. "This, in turn, would almost certainly overshadow the business of the EU27 in the months ahead. The continued uncertainty would also be bad for our businesses and citizens. Finally, if we failed to agree on any next extension, there would be a risk of an accidental no-deal Brexit."

Leaked draft conclusions seen by The Independent show leaders are likely to say an extension should "last only as long as necessary" and that the UK would leave on the first day of the next month after ratification was complete. They are also expected to include warnings that the UK should act in a "constructive an responsible" manner – following suggestions from Brexiteers that the UK should cause chaos at EU institutions while it remains in the bloc. The end date of the extension is still yet to be agreed, and is currently marked with "XX.XX.XXXX" in the draft version.

There has been relief in Brussels and European capitals that the government is finally sitting down with Labour to build a consensus on a way forward for Brexit – but it remains to be seen whether the talks will produce a way to get the withdrawal agreement through parliament.

“A new element in this very, very serious and complex context we’re operating in is of course the fact that we have had cross-party discussions initiated finally with Labour by Theresa May,” chief negotiator Michel Barnier said.

“We all expressed our hopes and expectations in this regard ... that this dialogue will conclude with a positive result which will allow us at last to have a positive majority emerge with regard to this withdrawal agreement.”

He added: “This extension has to serve a purpose, to provide more time to ensure that the political process I’ve described can be crowned with success and that this majority can be attained.”

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Under EU treaties if the withdrawal agreement was approved by MPs before the end of the extension, the UK would be able to leave earlier – a dynamic Brussels dubbed a “flextension”.

The 27 EU presidents and prime ministers will make the final decision at the summit, which begins in the evening in the Belgian capital and is expected to run late into the night.

But the field of possibilities is wide open: last time EU leaders got together to agree an extension to Article 50 they tore up draft plans put together by officials and worked late into the night to draw up a new proposal of their own.

Among member states, France is said to be reluctant to see an extension run beyond the end of 2019, as some member states have proposed. Others such as Ireland and Germany are keen to allow the UK more time. Any decision on an extension would have to be unanimous – with even one dissenting voice acting as a veto.

It’s Groundhog Day again. So far absolutely nothing has changed Michael Roth, Germany EU affairs minister

On their way into the preliminary meeting on Tuesday to finalise plan for the summit, ministers expressed various degrees of optimism about the process.

Michael Roth, Germany’s Europe minister, was among the most critical, telling reporters: “It’s Groundhog Day again. So far absolutely nothing has changed. A long extension has to come with very strict criteria. We don’t have a time problem, we have a decision-making problem, especially on the British side. There are clear expectations here from our side, but we will keep our hand extended.”

France’s Europe minister Amélie de Montchalin said: “The UK has asked for an extension. The French position hasn’t changed. We consider this demand is neither agreed nor automatic. It’s very important it comes with a credible political plan which will pass during the extension.

“We want to understand what the UK needs this extension for and what is the political surroundings to have this extension. Then comes the question of the conditions; what role the UK wants to play during this extension time, how does it want to decide.”

The message was also echoed by the Netherlands. Foreign minister Stef Blok said: “It’s in the Dutch interest to avoid a hard Brexit, and if more time will be needed to avoid a hard Brexit we should allow for more time.

“Most important is that the UK makes clear what solution they will offer to avoid a hard Brexit.

“Until now we only have the request for an extension but we are hoping for a specific plan from the UK side of how to avoid a hard Brexit.”

Simon Coveney, Ireland’s foreign minister and deputy PM, appeared optimistic. He said: “I think there will be a strong view that countries need to work together to avoid a no-deal Brexit and that the current process underway in London where the Conservative Party and Labour Party are now talking seriously about trying to find a middle ground position, that’s something I think that ministers will want to encourage.