Leading Brexiteer Nigel Farage has met with the European Commission’s chief negotiator Michel Barnier in Brussels.

The former Ukip leader, who is still an MEP, warned Mr Barnier that unless Brussels offered “compromise” then support for quitting the bloc without any trade deal would increase.

His comments come as Theresa May appoints a new minister at the Brexit Department specifically in charge of preparations for a no-deal Brexit, as part of a wide-ranging cabinet reshuffle.

A European Commission spokesperson said that the EU had “for months now been busy on planning for all possible outcomes”.

Commenting on the meeting between Mr Barnier and Mr Farage, he added: “As you can imagine, the two men discussed the state of play of Article 50 negotiations.”

Following the meeting, Mr Farage said: “Mr Barnier clearly did not understand why Brexit happened. I left with the impression that it has not been previously explained to him that the Brexit vote was primarily about controlling mass immigration and democratic self-determination.

Brexit Secretary David Davis and Michel Barnier at a meeting in Brussels (EPA)

“Unless Mr Barnier can compromise somewhat and be prepared to give on services and financial services, the calls to go out of the EU under WTO [World Trade Organisation] rules will increase.”

He added: “I wouldn’t say it’s a happy new year for the Brexit deal.”

The move to emphasise the possibility of a hard Brexit on the UK side is the latest example of brinkmanship in the talks, which made headway in December after the Prime Minister worked around concerns from her Northern Irish allies, the Democratic Unionists, about the future of the province’s border.

Brexit: the deciders Show all 8 1 /8 Brexit: the deciders Brexit: the deciders European Union's chief Brexit negotiator, Michel Barnier Getty Brexit: the deciders French President Emmanuel Macron Getty Brexit: the deciders German Chancellor Angela Merkel Reuters Brexit: the deciders Commission President Jean-Claude Juncker EPA Brexit: the deciders The European Parliament's chief Brexit negotiator Guy Verhofstadt Getty Brexit: the deciders Britain's Prime Minister Theresa May Getty Images Brexit: the deciders Britain's Chancellor of the Exchequer, Philip Hammond PA Brexit: the deciders After the first and second appointed Brexit secretaries resigned (David Davis and Dominic Raab respectively), Stephen Barclay is currently heading up the position PA

Economists have warned that a no-deal Brexit would be catastrophic for the UK economy.

US think tank the Rand Corporation has said “no deal” could cost the UK $140bn (£103bn) over the next 10 years, while the Organisation for Economic Cooperation and Development has put the figure at £40bn in 2019 alone due to sluggish economic growth.