Brussels is making preparations for Brexit talks to collapse, an adviser to chief EU negotiator Michel Barnier has revealed.

Stefaan De Rynck confirmed European leaders are working on contingency arrangements if the UK crashes out of the bloc without a deal, but said the scenario was not desired.

The senior Brussels official also dismissed Brexit Secretary David Davis’s claim that Brussels will push the negotiations with the UK to the very last moment before Britain drops out of the EU.

Speaking at the Institute for Government think tank, Mr De Rynck said: “There is a clear negative impact from no deal, I think that that is clear, for both sides but especially for the UK economy.

“But it is not a scenario people want to work towards.

“We are preparing for it, that is for sure, all 27, but it is not a scenario that we in the negotiation room want to bring in that negotiation room.”

His words appear to contradict those made earlier this month by European Council President Donald Tusk, who said the “EU27 is not working on no-deal scenario,” adding: “We negotiate in good faith and hope for ‘sufficient progress’ by December.”

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

Mr De Rynck also dismissed claims by Brexit Secretary David Davis that Brussels will push the deal down to the wire, explaining that the EU does not want to “add risk” to the exit process by “playing with time”.

Hopes that negotiations would move on to Britain’s future relationship with the EU this month were dashed when Brussels chiefs said more work was needed first on the withdrawal talks – including the UK’s divorce bill.

But Mr De Rynck said “sufficient progress is not far away”, as long as Britain sets out how it believes the exit bill should be calculated.

“In terms of sufficient progress, we need a method to be able to reassure the 27 of the solidity of the UK guarantees on how it will honour its commitments,” he said.