Brexit: Angela Merkel's senior economic adviser says Theresa May's plan is impossible

'You can't eat a cake without paying for it', says German leader's ally

German Chancellor Angela Merkel’s senior adviser has warned that Theresa May’s proposed Brexit plan is impossible.

Ms May used a speech on Tuesday to tell international leaders that she would take the UK out of the single market, but still wanted to negotiate access to it.

Yet German politician Michael Fuchs said the Conservative's plan was "not possible" because "you can't eat a cake without paying for it".

The Prime Minister has said the UK is prepared to default to World Trade Organisation rules if the EU does not cut a favourable agreement for Britain during Brexit negotiations, claiming: “no deal for Britain is better than a bad deal”.

But Mr Fuchs told Sky News: "I did not really get it out of this speech that she wants to give up something.

"It was a little bit like cherry picking. So to speak: you can’t eat a cake without paying for it."

Responding to Ms May's speech, Ms Merkel cautiously welcomed the fact that London had accepted that free movement of EU citizens was not something it could opt out of without losing other EU rights.

"There cannot be any cherry picking by Britain in Brexit negotiations," she told an economic conference, adding that access to the bloc's single market was ultimately linked to accepting the EU's four freedoms - of movement of goods, capital, people and services.

"The speech made by British Prime Minister Theresa May has given us a clear impression of how Great Britain wants to proceed.

"The main thing is that Europe does not let itself be divided and we will make sure of that via very intensive dialogue," she added.

Ms May had suggested Britain would prefer to retain a form of "associate membership" of the union, which would limit red tape for businesses who export to continental Europe

Mr Fuchs added: "Look at the situation with Switzerland and Norway, at the moment they pay quite a lot money – actually, more than the UK per capita – to the EU and Britain doesn’t want to do anything. I think this is not possible.

“We have four freedoms and this is not negotiable – if you have one of them and you don’t want it, it is not possible because I call it cherry picking.”

The German economic adviser is the latest to discredit the proposals, which have been branded unrealistic by European leaders and business chiefs alike.

The European Parliament's appointee to lead Brexit negotiations said on Tuesday Ms May was creating an "illusion" with her Brexit proposals.

Guy Verhofstadt, a former Prime Minister of Belgium, said: “I think it creates an illusion that you can go out of the single market and the customs union and you can cherry pick and still have a number of advantages,” Mr Verhofstadt said.

“I think this will not happen. We shall never accept a situation in which it is better to be outside the single market than be a member of the European union."

He added: “If you want the advantages you of a single market and customs union, you have to take the obligations."