Theresa May has insisted Britain's offer of a Brexit fee around £40bn will be "off the table" if there is no final deal on a future UK partnership with the EU.

Having returned from Brussels last week with a draft agreement on initial divorce matters, the Prime Minister faced a 105-minute grilling by MPs on the terms of the deal struck on the first phase of Brexit negotiations.

Mrs May confirmed the UK has consented to a financial settlement worth between £35bn-39bn; agreed measures to protect the rights of EU citizens in the UK; and made a commitment to there being no hard border on the island of Ireland.

The Prime Minister hailed a "new sense of optimism" in Brexit negotiations, with "good news" for both Leavers and Remainers who want a "smooth and orderly" departure from the EU.

But, Mrs May repeated her warning "nothing is agreed until everything agreed" as she predicted there could yet be an uneasy path ahead.


Image: Jeremy Corbyn accused the PM of having 'scraped through' the first phase of Brexit

Strikingly, the Prime Minister suggested to the House of Commons that Britain would not be handing over tens of billions of pounds to Brussels without a final trade deal from the second phase of Brexit talks.

She said: "This offer is on the table in the context of us agreeing the partnership for the future, agreeing the next stage and agreeing the partnership for the future.

"If we don't agree that partnership then this offer is off the table."

Her statement contradicted last week's pronouncement by her Chancellor Philip Hammond, who claimed it is "inconceivable" the UK would walk away from financial obligations in the result of unsuccessful negotiations.

Labour leader Jeremy Corbyn accused Mrs May of having "scraped through" the first phase of Brexit, as he highlighted apparent disputes within the Government over the exact terms of last week's agreement.

What happened to the Brexit red lines?

He pointed to how Brexit Secretary David Davis had earlier sparked confusion over whether Friday's deal is legally enforceable, as he rowed back on his claims 24 hours earlier that it was not.

Mr Corbyn also called on Mrs May to drop her "unnecessary exit date deadline" of 29 March, 2019 from the EU Withdrawal Bill - the Government's flagship Brexit legislation.

"I'm sure the whole House, and indeed I think probably the whole country, would rather get the best possible deal a little bit later, if that meant a better deal for people's jobs and the economy."

However, Mrs May signalled her Government's intent to push ahead with their plan to write the Brexit date into law.

Amid recent signs Labour could be softening its Brexit stance to include membership of the EU's single market and customs union, the Prime Minister accused the Opposition of having had 12 different positions on the UK's withdrawal.

Image: The PM was praised by both Tory Leavers and Remainers

In a rare display of unity, the Prime Minister was congratulated on her deal by both Leavers and Remainers on the Conservative benches, with ex-minister Robert Halfon praising Mrs May's "Zebedee-like qualities of resilience", in a reference to TV's Magic Roundabout character.

The Prime Minister was also thanked for penning an open letter to EU nationals on Monday, in which she told those living in the UK: "I want you to stay."

The DUP's Westminster leader Nigel Dodds, whose party prop up the Government, praised Mrs May's "personal devotion" to altering the text of the deal to allay concerns in Northern Ireland.

However, some Tory Brexiteers hinted at their fears Britain could be left aligned with EU rules after Brexit in order to solve the Irish border question, while Leave-supporting Philip Davies struck a sole voice of discontent on the Brexit bill.

The Government further sought to ease Brexit tensions in the Tory party, and the prospects of a Conservative rebellion on the EU Withdrawal Bill, by accepting the creation of a new committee to scrutinise ministers' use of so-called Henry VIII powers in the bill.