Theresa May has implicitly accepted EU plans to postpone Brexit trade talks until March, amid concern that the British Government does not know what sort of trade deal it wants from the process.

Speaking to European national leaders over dinner at a summit in Brussels on Thursday night the PM accepted that “priority” should be given to talks on the transition period rather than the trade framework.

Leaks of a draft statement expected to be agreed to by the EU27 on Friday show leaders will call “on the United Kingdom to provide further clarity on its position on the framework for the future relationship” before talks about it can properly start in March next year.

While Downing Street officially still says it wants trade talks to start “as soon as possible”, Ms May’s comments represent the first time the Government has agreed to put trade on the backburner. The PM is understood to have made no serious intervention at the dinner urging the timetable – set to be agreed by the same leaders the next day – to be sped up.

The climbdown on the delays is likely to put more pressure on Britain's negotiators, who are racing against the clock to get a deal done before Britain automatically leaves the EU under Article 50 in March 2019. It also comes after the Prime Minister lost a key House of Commons vote on Wednesday night that will give hostile MPs from all parties the opportunity to interfere with the Brexit process.

“I make no secret of wanting to move on to the next phase and to approaching it with ambition and creativity,” Ms May told the leaders over dinner.

“I believe this is in the best interests of the UK and the union. A particular priority should be an agreement on the implementation period so we can bring greater certainty to the businesses in the UK and across the 27.”

Striking a positive note after her progress made last Friday, Ms May added: “While many will say that the last few months show how difficult these future negotiations will be, the EU and UK have demonstrated what can be achieved with commitment and perseverance on both sides.”

Speaking earlier in the summit today at a session on education and culture, the Prime Minister also stated her intention for the UK so stay in the Erasmus universities programme until at least 2020.

She said the announcement would “provide clarity for young people and the education sector”, although Downing Street still says any decision on whether the UK will stay in the education programme Erasmus after 2020 – when the current funding round runs out – will be subject to negotiation.

The European Commission on Thursday evening said it could not speculate on the UK’s participation in the programme, which allows students to take a year studying abroad in a different EU country.

The European Council will continue to follow the negotiations closely and will adopt additional guidelines in March 2018, in particular as regards the framework for the future relationship. It calls on the United Kingdom to provide further clarity on its position on the framework for the future relationship. Leaked draft European Council text set to be agreed tomorrow

Eyebrows were raised in Brussels about the future of the trade framework talks earlier this month after Downing Street confirmed that the Cabinet had not actually discussed what trade deal the Government wanted. The Prime Minister’s spokesperson said the discussion would be had before Christmas.

The Government’s general level of preparedness for the process was also called into question after Brexit Secretary David Davis admitted that 58 government studies into Brexit’s effect on the economy which he previously claimed included “excruciating detail” and repeatedly claimed existed, did not actually exist.

Although talks about the political framework for the UK’s future trade relationship with he EU can begin in March according to the current timetable, the European Commission made clear ahead of the summit that it believes the bulk of trade negotiations for a full and free trade agreement will be conducted during the transition period.

The PM’s acceptance of the European Council’s timeline also holds echoes of the beginning of negotiations earlier this year, when she accepted that separation issues would be dealt with before moving onto trade talks.

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

At the summit the Prime Minister held bilateral meetings with Joseph Muscat, the Maltese Prime Minister, and Mateusz Morawiecki, the new Prime Minister of Poland, who took office after a party coup earlier this month.

Other discussed at the summit on Thursday included the inking of plans for closer European defence cooperation and the on-going controversy over mandatory refugee quotas for EU countries. On Friday the EU leaders will discuss plans to create a European Monetary Fund to help out member states in financial difficulty, and after that they will formally decide whether sufficient progress has been made in Brexit talks to move to the next phase.