Theresa May has had her Brexit strategy comprehensively rejected by EU leaders, who sent her away with an ultimatum to rewrite her plans within four weeks.
It leaves Mrs May with little defence from circling Brexiteers in her own party, with just over a week until the Conservative conference.
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Downing Street had expected the 27 other EU leaders gathered in Austria to limit their criticism of her plans in order to shore up the Prime Minister’s position, with fears of a no-deal Brexit growing.
But Mr Tusk dashed any hopes of a reprieve, saying after a working lunch to discuss the UK’s plans: “Everybody shared the view that while there are positive elements in the Chequers proposal, the suggested framework for economic co-operation will not work, not least because it is undermining the single market.”
He said the “moment of truth” in the negotiations would now come at the next full European Council meeting in October, when it will be decided whether to hold a special summit in November to finalise the withdrawal agreement.
European leaders were equally blunt, with German Chancellor Angela Merkel saying the EU27 were agreed that, “in the matter of the single market, there can be no compromises”.
French President Emmanuel Macron said there was “consensus” that the UK’s proposals were “not acceptable”.
The Chequers plan could not be regarded as a “take it or leave it” offer, Mr Macron said, adding that he hoped there would be “new British propositions” on the table by October.
But in a warning of the growing risk of the UK leaving the EU without a Brexit agreement, the French President said there must be “no blind deal” that fails to set out a clear outline of the future relationship.
And he issued a harsh assessment of Brexiteers who he said “predicted easy solutions”. “Those people are liars,” Mr Macron said. “They left the next day so they didn’t have to manage it.”
After what she described as a “frank” meeting with Mr Tusk, Mrs May – who was not present at yesterday’s lunch –insisted that the plan drawn up at her country residence in July remains “the only serious and credible proposition on the table” for resolving the issue of the Irish border.
She has flatly rejected a European Commission backstop proposal for Northern Ireland to remain within the EU customs area after Brexit, arguing that this would draw a border down the Irish Sea.
The Prime Minister said a solution for the border “cannot divide the United Kingdom into two customs territories”.
“On the economic partnership, there is no solution that will resolve the Northern Ireland border which is not based on the frictionless movement of goods,” she said.
But at a press conference in which she appeared visibly angry, Mrs May said the UK would “shortly” be coming forward with new proposals for the backstop at the border.
Mr Tusk said: “In October we expect maximum progress and results in the Brexit talks and then we will decide whether conditions are there to call an extra summit in November to finalise and formalise the deal.
He added: “Today I am a little more optimistic when it comes to a positive outcome of our negotiations.
“Unfortunately we cannot at this stage exclude a no-deal - it depends on both sides of negotiations.”
European Commission President Jean-Claude Juncker sounded nonchalant about the mounting possibility of a no-deal Brexit, saying: “The Commission has prepared in detail all for all the consequences of a no deal. So don’t worry. Be happy, don’t worry.”
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The Dutch Prime Minister Mark Rutte told journalists: “I think we have made more preparations for no deal than the United Kingdom.”
Labour’s Shadow Brexit Secretary Sir Keir Starmer called on Mrs May to abandon her opposition to the UK remaining in the European single market.
“It has been clear for weeks that Theresa May’s Chequers’ proposals cannot deliver the comprehensive plan we need to protect jobs, the economy and avoid a hard border in Northern Ireland,” he said.
“With just weeks to go until a deal must be struck, the Prime Minister cannot keep ignoring this reality. She needs to urgently drop her reckless red lines and put forward a credible plan for Brexit.”
In a letter to opposition leaders at Westminster, Nicola Sturgeon yesterday called for the Brexit timetable to be extended in the event that no deal is reached, to “avoid an economic cliff edge”.
The Scottish First Minister said she was issuing an “urgent reality check”, warning: “It’s time for everyone in the UK political establishment to wake up to the reality of what now faces us.
“If the choice we face is between no deal and no detail, then an extension to the Article 50 negotiation period must be on the table as the only way to avoid an economic cliff edge, and allow all alternative options to be considered.”
But Ms Sturgeon insisted it “seems increasingly likely” that the statement setting out the future relationship between the UK and the EU “will be vague and lacking in meaningful detail”.
The First Minister said: “A no-deal Brexit will, by the UK government’s own admission, lead to dire economic consequences and a shortage of medicines and foodstuffs.
“Meanwhile, a ‘blind’ Brexit will simply kick all of the difficult decisions into the long grass –but with the UK already out of the EU. Not only would that continue the uncertainty, it would be tantamount to stepping off a cliff edge blindfolded, with no idea of what the landing place will be.”