The Home Office is making the “hostile environment” worse for EU citizens ahead of Brexit, the European Parliament is to warn.

A leaked draft resolution seen by The Independent shows that the EU legislature is preparing to express its “grave concern” at the chaotic approach of Priti Patel’s department, as well as problems with the EU settlement scheme.

MEPs are demanding a full review and replacement of the scheme for European nationals, which they say has seen as many as 42 per cent of applicants not given full settled status but instead left with “pre-settled status”.

“This can be avoided if the UK opts for an administrative procedure which is declaratory in nature and places the burden of proof on the UK authorities to challenge the declaration,” the parliament will say, adding that it “urges therefore the UK to review its approach”.

Figures released on Tuesday show there has been a surge in applications for the scheme in the last month amid mounting fears of a no deal.

The resolution is signed by the leaders of all the EU parliament’s mainstream political groups, who have agreed not to amend it – meaning it is certain to pass in its current form. It will be discussed next Wednesday in Strasbourg, after which it will be formally voted on.

MEPs reserve their strongest condemnation for the Home Secretary’s bungled announcements on free movement. Ms Patel announced on 19 August that she wanted to end free movement as soon as the UK left the EU, but U-turned on 1 September less than two weeks later after it emerged the policy was completely impractical.

The MEPs said the parliament “expresses its grave concern that recent and conflicting announcements by the Home Office in relation to free movement after 31 October 2019 have generated very unhelpful uncertainty for EU citizens resident in the UK, with the risk that those announcements may exacerbate the hostile environment towards them as well as impacting negatively on their ability to enforce their rights”.

The wide-ranging seven-page resolution, which is understood to have been drawn up in consultation with Michel Barnier’s Brexit team, covers other areas of policy as well.

On the British government’s attitude to negotiations, MEPs warn: “It appears the UK government has made planning for no deal its main policy priority and some of the members of the UK government believe that a no-deal exit would be the optimal outcome.”

They add that the government’s decision to suspend parliament – declared unlawful in the courts on Wednesday – “makes the possibility of the withdrawal of the UK from the EU without an agreement more likely”.

Government figures show applications for the EU settlement scheme more than doubled from 131,300 in July to 299,000 in August, marking the highest number since the scheme was fully rolled out in April.

The Home Office said the total number of applications received to date (12 September) was more than 1.3 million, with around 200,000 people applying in the last 12 days alone.

Priti Patel was forced to U-turn on her first major announcement as home secretary after two weeks because she hadn’t properly thought it through (EPA)

As of 31 August, a total of 188,600 people, 14 per cent of those who have applied, were still waiting for an outcome on their applications.

Maike Bohn, co-founder of the3million, which represents EU citizens in the UK, said: “The worrying increase in grants of pre-settled status and the rapidly expanding backlog of undecided cases are a time-bomb for the next government.

“It is not unreasonable to suspect that the growing backlog is hiding decisions that will tarnish the government’s ‘no refusal’ mantra. The government needs to engage with this worrying trend and tackle the underlying causes.”

Chai Patel, legal director at the Joint Council for the Welfare of Immigrants, said the government was “using fear” against EU citizens.

He added: “Fear of losing their houses, their jobs, their right to live in the country that is their home. Those fears will become a reality for those most vulnerable EU citizens who will not have applied by December 2020, like children in care.

“We need automatic settled status for all EEA nationals and their family members, so no one needs to be afraid.”

He added: “MEPs are absolutely right to urge the UK government to replace the settled status scheme with an automatic grant of settlement for Europeans in the UK.

“We welcome their intervention in this matter and we join them in calling on the government to change course before it is too late and tens of thousands of the most vulnerable EEA nationals – for example children in care and homeless people – become undocumented and at risk of losing their rights, being detained and even removed from the country.”

Luke Piper, solicitor at South West Law, who has helped a number of EU nationals with their settlement applications, said: “The European Parliament are repeating the asks set out by many experts, stakeholders, charities representing those most at risk, the Home Affairs Select Committee and indeed, EU citizens themselves.

“All EU citizens need their status declaring in law urgently. The risks otherwise to those who do not apply are potentially manifold and significant. The government’s continuing failure to meaningfully engage with this issue is rightly creating this chorus of criticism.”

In the same resolution, the European Parliament’s political groups also agreed that they will not stand in the way of an extension to Article 50 if a delay is required to avoid a no-deal Brexit, hold an election or referendum, or implement a deal.

They also warned against the UK’s recent push to scrap “level playingfield” safeguards in relation to trade – shorthand for agreed baseline rules on environmental standards, labour regulations and state aid.

They say the move damages the prospect of a future UK-EU trade agreement.

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“Any free trade agreement that fails to respect such levels of protection would not be ratified by the European Parliament,” they state.

The latest condemnation of the EU settlement scheme from the parliament comes after the Advertising Standards Agency banned an advert for the scheme created by the Home Office, claiming that it was misleading. The notoriously incompetent department had falsely claimed that applicants only needed a passport or ID card to complete the application – when in fact many applications require significantly more documentation.

The Independent revealed earlier this month that around 5,000 vulnerable EU national children in Britain face losing their rights after Brexit because the Home Office has been providing “woefully inadequate” support for them to apply for the scheme.

Leading Brexiteer Daniel Hannan warned last month that the scheme risked turning into another Windrush scandal.

A Government spokesperson said: “The Government has made an unequivocal guarantee to EU citizens living in the UK.

“The EU Settlement Scheme is performing well and provides a simple way for EU citizens to guarantee their rights – over 1.1 million people have been granted an immigration status that is secured in UK law.