The prime minister of Flanders has proposed a radical North Sea Union linking Britain to a cluster of regional states to cushion the Brexit shock, a sign that European leaders are starting to look for creative ways to heal the referendum rift.

Geert Bourgeois, leader of Belgium’s dominant region, said there is a growing consensus in EU capitals that it would be fatal mistake to try to “punish” Britain.

“More and more people now agree that there has to be a ‘soft Brexit,” he told the Daily Telegraph.

Mr Bourgeois said the vote to leave the EU was a sad moment but he insisted that it is possible to find a new modus vivendi on a friendly footing, to the benefit of all.