Leaked document reveals fears in Brussels that Home Office does not have systems in place to select who has right to stay

The EU fears millions of its nationals living in the UK will be left stranded in a legal no man’s land after the country leaves the EU because of the weaknesses of the British immigration system, a document obtained by the Observer reveals.

MEPs and senior European diplomats fear that chaos will ensue as the Home Office does not have the information or systems in place to select who can stay, once the UK restricts access to nationals from the other 27 EU member states. It is widely assumed that, at an early stage of the article 50 negotiations, Britain and the EU will agree a cut-off date after which foreigners who have settled in the country will not have an automatic right to remain.

But a leaked document, drawn up by MEPs on the European parliament’s employment committee to aid the EU’s Brexit negotiations, warns: “The UK has no population register. In practice it would be difficult to determine which EU27 citizens were residing legally in the UK before the Brexit would have taken effect.

“If all 3.3 million EU citizens were to initiate procedures aimed at proving the ‘exercise of treaty rights’ the administrative system would be overburdened.”

An Opinium poll for the Observer published today finds that a large majority of Britons believe EU nationals living in the UK should be given the automatic right to stay. Just 5% said they should be asked to leave, but eight months after last June’s referendum, uncertainty about the future has become a source of deep anxiety among European citizens living in the UK.

Responding to the Brussels report, one senior diplomat from an eastern European state, said: “It came as a surprise to me that the UK was unable to monitor comings and goings – they will have to find a workable solution quickly.”

Tony Blair’s government was forced to drop plans for a national ID card and population register in 2007 because of concerns over the security of citizens’ data, not least from David Davis, now secretary of state for exiting the EU.

The Cabinet Office advises that EU nationals do not need to register for any documentation in order to enjoy free movement rights and responsibilities in the UK. The government does not track EU nationals as they enter and leave the country. The databases of the Department for Work and Pensions, HM Revenue and Customs and the Home Office do not share information.

The government could use the national insurance number system to help distinguish between those who were in the country before and after Brexit, but it would not cover those who neither work nor claim benefits. Allowing the right of residence to anyone who has registered for a national insurance number before a particular date would also give a right to stay to potentially millions of people who are no longer in the country, including those who were in the UK only briefly and have little or no connection to the UK.It would also not deal with the question of the rights of family members of those with national insurance numbers to join their relatives in the country.

Last week Theresa May stressed the importance of an early deal on EU citizens’ rights after Brexit during talks with the French prime minister, Bernard Cazeneuve, at Downing Street, amid growing criticism of the government’s refusal to give early and absolute assurances. Some ministers have suggested that the issue will be a bargaining chip in the talks.

Responding to the leaked document, Keir Starmer, shadow secretary of state for exiting the EU, told the Observer that the government had not done enough. He said: “This report reinforces the need for the PM to take decisive action to support EU nationals in the UK. For months Labour has called for the PM to show a lead on this and to end unnecessary uncertainty for EU nationals. Not only has Theresa May failed to do so, but we now hear of real concern that the immigration system she presided over for six years may not be able to properly process EU nationals’ cases. The PM needs to act swiftly to address this – both by unilaterally granting residency rights for EU nationals already in the UK and by ensuring the Home Office has the necessary resources in place.”

The Home Office declined to offer any guidance on how the government planned to distinguish between claims of EU nationals, claiming that work on the problem was ongoing. “We are currently considering the various options as to how EU migration might work once we have left, it would be wrong to set out further positions at this stage,” it said.“European citizens resident in the UK make a vital contribution both to our economy and our society. That’s why we will be making securing their status, as well as that of British nationals in the EU, a priority as soon as we trigger Article 50 and the negotiations begin,” a spokesman said.

EU nationals who have lived in the UK for five years can gain automatic permanent residency status, although there have been numerous cases of bosses asking for their foreign employees to acquire permanent residency cards in order to guarantee their jobs.

There has been almost a 50% increase in the number of EU citizens applying for permanent residency documentation since the vote on 23 June.

EU nationals say that to obtain permanent residency cards they have to complete an 85-page form requiring huge files of documentation, including P60s for five years, historical utility bills and a diary of all the occasions they have left the country since settling in the UK. Some have received letters inviting them to prepare to leave the country after failing to tick a box on a form.

The Liberal Democrats are confident that an amendment to the article 50 bill giving EU nationals a right to stay, irrespective of the coming negotiations and the number of years people have lived in the UK, will be successful in the House of Lords, placing May in a position of having to vote it down when the legislation comes back to the Commons.

The European parliament is also due to debate the rights of EU nationals in both the UK and on the continent on 1 March. Two of the parliament’s committees, are to host joint hearings to which Home Office ministers are set to be called to give evidence.

Lord Newby, the Lib Dem leader in the Lords, said: “The government is generating real fear and uncertainty amongst large numbers of people.”