Theresa May will be forced to 'abandon key parts of Brexit strategy to get EU deal', says Nick Clegg

Former Deputy Prime Minister says the UK should agree to a limited transition deal to pay the way for a future long-term settlement

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Theresa May will be forced to abandon key planks of her Brexit strategy in order to secure a deal within the two-year deadline for talks, former deputy prime minister Nick Clegg said.

A paper drawn up by the senior Liberal Democrat suggests that the only practical way forward would be to agree a limited transitional deal, paving the way for future talks on a long-term settlement.

The analysis, produced with a panel of experts and following private talks with key players in Brussels and other EU capitals, suggests the Prime Minister will need to accept paying a "Brexit bill" to the EU in order to secure agreement to run talks on future trade deals at the same time as discussing the terms of the divorce from Brussels.

Mr Clegg, a staunch Europhile and the Lib Dem Brexit spokesman, said: "The cumulative effect of the Prime Minister's decisions to date has been to reduce the already slim chances of striking the deal she wants in the time available.

"This analysis confirms that something will need to give - on both sides, but most significantly on the part of the UK.

"The sooner the Prime Minister explains to the British people that any negotiation involves significant compromise, the sooner we will be in a position to strike the best possible deal for both the UK and the EU. At present, her red lines are internally inconsistent and based on a wholly unrealistic set of assumptions."

Once Mrs May has triggered Article 50, the UK will have two years to secure a withdrawal agreement.

The Prime Minister wants talks on a comprehensive free trade deal to take place at the same time - something Brussels has been reluctant to accept.

Mr Clegg's paper indicates that the actual timetable will be even tighter, because of arguments about money and the sequencing of talks and the need for any deal to be signed off by the European Parliament and 27 member states.

The analysis concludes that the "only practical way forward" is early agreement on a transitional deal, which largely maintains the operation of existing arrangements, so that sufficient time can be created for a detailed and long term settlement.

The paper suggests Mrs May will have to agree to pay a divorce fee, but without finalising a fixed sum, in exchange for the EU to agree to trade talks on her timetable.

It suggested Mrs May will have to accept that European Court of Justice would have jurisdiction of the transitional deal - extending the rule of EU law beyond Brexit, something seen as a red line by ministers.