Angela Merkel is open to backing Theresa May’s request for a short Brexit extension as the German chancellor seeks to maintain the pressure on British MPs to support the withdrawal agreement, according to senior EU sources.

In the face of moves from elsewhere in the EU to insist on a longer delay to Britain’s departure, Merkel is keeping all options on the table ahead of this week’s EU summit and is said to be willing to back 30 June as an exit date. She is thought to be concerned that Donald Tusk’s proposal of a year-long extension, with an option to exit earlier on ratification of the withdrawal agreement, could be self-defeating.

The thinking in Berlin will be a boon to the prime minister, who on Friday proposed the 30 June extension, with the promise that the UK would hold European elections if it had not ratified the withdrawal agreement by 22 May. Tusk, as president of the European council, suggested on the same day that his “flextension” would put the onus on the British government to decide its own fate while freeing Brussels from repeatedly revisiting the issue.

But Merkel is said to understand May’s anxiety that this idea would lift pressure on the Commons to ratify the withdrawal agreement.

Diplomats from other EU capitals have suggested that, given the divisions between leaders, a compromise position could be a summer-end date, with a commitment to hold European elections.

Germany has clashed with France over the issue. Last week the French president, Emmanuel Macron, warned that Britain and the EU were heading for no deal, and that the bloc could not “forever be the hostage of a political crisis in the UK”.

During a meeting of EU27 ambassadors, the French ambassador suggested that, without a clear plan on how an extension would be used by the time a crunch summit of leaders is held on Wednesday this week, the bloc might offer only a two-week extension beyond 12 April to prepare the markets ahead of a no-deal exit.

Philip Hammond talks to his German counterpart Olaf Scholz at the meeting of EU finance ministers in Bucharest. Photograph: Reuters

The ambassador said that his government felt that the EU should stick with the conclusions at the last summit, under which the UK would be granted an extension to 22 May if the withdrawal agreement were ratified before 12 April. The British government would then have to offer a strong justification to have an extension beyond that point if the deal had not been approved.

“We really feel we should stick to the decision of the council on 21 March,” France’s ambassador said, according to a diplomatic cable seen by the Observer. “If the request was to come for a long extension, provided that there is a case for it, it must be precisely formulated conditions by which we agree to extend to 1 July.”

Speaking at a meeting of EU finance ministers in Bucharest on Saturday, the UK chancellor, Philip Hammond, sought to reassure other member states that a way forward was emerging in London, ahead of Wednesday’s summit, at which a decision on an extension will be made.

“Most of the colleagues that I am talking to accept we will need longer to complete this process, so I am optimistic about council on Wednesday,” he said. “I understand EU colleagues are somewhat fed up that the process has taken as long as it has. We’re also fed up that we haven’t been able to complete this earlier, but I’m very confident we will get it done.”

“I am optimistic that we will reach some form of agreement with Labour later,” Hammond had added of the ongoing cross-party talks. “The conversations with the Labour party continue. They were continuing last night, we are expected to exchange more text with the Labour party today.”

Asked whether a second referendum could be agreed with Labour, the chancellor said the government had approached the talks without any “red lines”.

Should there be a further extension to 30 June, or longer, Berlin and Paris are united in wanting assurances on the UK’s future behaviour as a member state, including guarantees that the British government would abstain from playing a decisive role in key budget decisions or senior appointments.

A tweet from Jacob Rees-Mogg, the Eurosceptic Conservative MP, in which he said the UK “should be as difficult as possible” in the event of a long extension, has had an impact. “We could veto any increase in the budget, obstruct the putative EU army and block Mr Macron’s integrationist schemes,” Rees-Mogg had said. It was held up by one senior EU official as evidence “of what they are capable of”, during the ambassadors’ meeting.

“Let’s be honest, having an extension will bring political and legal problems,” France’s ambassador had told his colleagues, according to the diplomatic cable. “So before we go there, we have to be very, very careful. I am not sure that is where my government is at this stage.”

The German ambassador is said to have counselled the other EU diplomats not to make a “hasty decision that we rue afterwards”, and to have pointed to the ongoing talks with Labour as a hopeful sign.

One diplomat said France shared the opinion of the EU’s chief negotiator, Michel Barnier, that the UK would quickly be forced back to the negotiating table if the country did crash out. Brussels would then present the same terms as in the withdrawal agreement on the £39bn divorce bill, citizens rights and Irish backstop to avoid a hard border on the island of Ireland.

“But other capitals are not convinced,” said an EU diplomat. They worry that pride will stand in the way, and this could end in unforeseen ways. “It could poison relations for decades.”