Britain will not get a Brexit deal better than the current single market, Japan's ambassador to the UK has said.

Koji Tsuruoka, who took up the role just over a fortnight before the referendum in June 2016, said Japanese firms are watching negotiations and will want to continue to be located in the single market after next March.

Car makers Nissan and Toyota have large factories in the UK and sell many of their cars into Europe from the UK.

Japanese Ambassador to the UK Koji Tsuruoka says his country has a 'high stake' in Brexit trade negotiations (Jack Taylor/Getty Images)

Mr Tsuruoka told the Observer: “The reason that many of those companies have come is that this is the best gateway to Europe.

“If that is in danger, if that is no longer sustainable, of course they will have to look at what they will have to do best.

“I don't think the single market could be substituted by something and be better or even be the same.”

Mr Tsuruoka has previously said Japan has a “high stake” in Brexit trade negotiations – 40% of Japanese investment into the EU is spent in the UK – and firms cannot operate in the UK if it is not profitable to do so.

The ambassador also said he was told he did not have to worry about the result of referendum on Britain's continuing membership of the EU as British people “don't make adventurous decisions”.

“Now I have to keep in mind that you don't predict what is going to happen in the UK,” he told the paper.

It comes after the Trans-Pacific Partnership – which Mr Tsuruoka spent three years negotiating – was on the agenda as Australian Prime Minister Malcolm Turnbull met Theresa May on Saturday.

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Mr Turnbull said: “Trade is clearly very high on your agenda, as it always is on ours. Trade means jobs.

“That's why we persevered with the Trans-Pacific Partnership, got that signed despite the US dropping out.

“I'm pleased to see your Government's interest in potentially joining that at a future date when you have left the European Union.”