May faces Cabinet showdown over Brexit as EU door left ajar for deal

Theresa May has been issued a “last call” for her government to agree what kind of Brexit deal it wants after EU leaders left a summit in Brussels voicing concern at the lack of progress and warning that is running out.

EU Council President Donald Tusk told the Prime Minister to “lay the cards on the table”, while EU chief negotiator Michel Barnier offered to restart formal Brexit talks as early as Monday, saying “time is very short”.

Brussels must wait until a cabinet meeting at Chequers next Thursday, however, to see whether Mrs May can get ministers to back a single proposal on future trade that will meet EU demands and be acceptable to Brexiteers in government.

German Chancellor Angela Merkel revealed that the Prime Minister will come to Berlin to sell whatever deal she reaches with her ministers after the Chequers showdown.

The next gathering of EU leaders in October is effectively the last chance to present an agreement on the UK’s future relationship with Brussels, covering the thorny issue of customs arrangements and how they will prevent a hard border in Ireland.

At the end of the two-day meeting in Brussels, EU leaders took minutes to agree a joint statement expressing “concern that no substantial progress has yet been achieved on agreeing a backstop solution for Ireland/Northern Ireland”.

In a press conference concluding the summit, Mr Tusk warned that “the most difficult tasks are still unresolved”.

“If we want to reach a deal in October we need quick progress,” he said. “This is the last call to lay the cards on the table.”

Ministers will be asked at Chequers to agree a white paper setting out the UK’s proposals for the future trading relationship.

The government’s two existing proposals, for a “customs partnership” and technology-based system for monitoring the flow of goods, have been rejected by the EU, leaving only a “backstop” proposal that Northern Ireland effectively remain in the single market and customs union – an arrangement that would be politically unacceptable in the UK, not least to Mrs May’s DUP allies.

Suggestions that the UK could stay in the EU single market for trade in goods alone has also been dismissed, prompting speculation that the Prime Minister will have to offer major concessions on the free movement of people to secure a deal. Mr Barnier told journalists in Brussels: “We are waiting for the UK white paper and I hope it will contain workable and realistic proposals but let me mention once again that the time is very short... I’m ready to invite the UK and the delegation to come back and present next Monday.”

The Irish prime minister Leo Varadkar, who said he was shown passages of the draft white paper, insisted there would be no “cherry picking” of aspects of the single market. “While we regret them leaving we are not going to let them destroy it,” he said.