A group of top German economists has told the EU to tear up the Irish backstop and ditch its ideological demands in Brexit talks, calling instead for a flexible Europe of concentric circles that preserves friendly ties with the UK.

Brussels must “abandon its indivisibility dogma” on the EU’s four freedoms and come up with a creative formula or risk a disastrous showdown with London that could all too easily spin out of control.

A joint report by the influential Ifo Institute and universities across Germany and Europe warned that Brussels may be deluding itself in thinking that the EU has the upper hand in all respects or that the British will inevitably capitulate before March 29.

“In a standard game of chicken, the actor who loses the most will dodge first. Can the EU really be sure that losses are sufficiently asymmetrically distributed that it ‘wins’ this game?” the report asked.

“This is a very dangerous game, both for the UK and for EU. It is wiser to take the threat of a hard Brexit at face value and react accordingly. Recognising that a hard Brexit is in no one’s interest and that it would cause irreparable political as well as economic damage, we call both on the UK government and the EU Commission to rethink their ‘red lines’ and return to the negotiation table,” it said.