European Union judges will block legal action against Britain for refusing to pay the Brexit bill after a no-deal exit, lawyers have told The Telegraph, as Downing Street insisted it would not pay the entire £39 billion financial settlement if the UK crashes out.

Downing St on Thursday said it would pay its “legal obligations” but not the full amount. The Telegraph understands the British government would be reluctant to pay the EU budget contributions up to 2020 after it was no longer a member.

On Wednesday, in Brussels, the European Commission said it would expect Britain to still pay the full £39 billion financial settlement, including the budget payments, after no deal. Later Jean-Claude Juncker warned that no deal had become more likely after the House of Commons voted to renegotiate the Brexit deal.

“The agreement which we have under the Withdrawal Agreement which obviously structures the payments and sets out an agreed amount or range would fall away,” a Downing St spokesman said. “However, the Prime Minister has said that where we have legal obligations we would meet those.”

Brexiteers have always insisted that Britain legally owes the EU nothing, while Brussels insists the Brexit Bill is a settling of accounts incurred over the UK’s membership of the bloc. After no-deal, the EU would face a budget shortfall that would have to be made up, probably by the EU 27.