Conflict and confusion over Britain's Brexit strategy

Differences over how to address concerns such as immigration and trade access are becoming more pronounced.

The City of London, the financial district of the British capital. A group of London’s financial lobbyists will head to Brussels on July 5, 2017, for their first meeting with European officials and stakeholders since Brexit talks began. Frank Augstein / AP Photo / September 2, 2015

British politicians and officials are in disarray over the country’s approach to exiting the European Union as a revolt against prime minister Theresa May’s tough negotiating stance gathers pace.

Senior civil servants have revealed that the choice ahead lies between making payments to stay in a very close trading arrangement with the EU or accepting a looser deal modelled on a recent EU-Canada free-trade treaty.

The prospect of replicating the current ties while restoring immigration controls and making free-trade deals with the rest of the world has been deemed unrealistic. This objective was famously dubbed "having our cake and eating it" by Boris Johnson, the foreign secretary, after the referendum last June.

Mrs May's position that "no-deal is better than a bad deal" has also been dismissed as unworkable by her own officials, according to a report in the anti-Brexit Guardian newspaper.

While voters have decided to leave the European Union, the manner of Britain's departure is more disputed than ever. The failure of Mrs May's Conservative party to win a majority at the general election last month has thrown open the political debate on the negotiations.

"The economic arguments that had got lost in the last six months are now being heard again and those who had tried to railroad this by saying 'you are talking our country down' are now being given a run for their money," a source told the Guardian.

It has not helped Downing Street that recently departed figures are speaking out.

James Chapman, formerly the right hand man of David Davis, the Brexit secretary who oversees the Brussels negotiations, told the BBC that Mrs May’s absolutist positions on immigration had "hamstrung" the British.

“This is a new parliament, there's a new reality. She has to get these things through parliament,” he warned. “I think that there would be room to recalibrate some of this approach but at the moment she is showing no willingness to do this.”

Meanwhile David Jones, who was sacked as Mr Davis’s deputy following the election, weighed in to call on the government to shore up preparations for Brexit by recruiting more negotiators.

In a further embarrassment, Downing Street was on Monday forced to deny another report it was already braced to quit the EU talks in September as it anticipates a bust-up over the €100 billion (Dh417bn) exit bill demanded by Brussels. Business leaders were said to have been given the warning last week in a briefing from the prime minister's office.

The City of London signalled its concerns over the lack of clarity by revealing it would send its own delegation to consult with Brussels. Mark Hoban, a former Conservative treasury minister, will lead a team to meet Brussels officials to discuss continuing access to the bloc for the banking and insurance industries.

The fraying relations with European neighbours as a result of the Brexit pressure got another jolt when Michael Gove, a leading figure in the Leave campaign who has been restored to the cabinet, announced London would restore national controls over access to its seas for foreign fishing fleets.

The move drew a rebuke from Ireland, which shares sensitive sea lanes with Britain, and the four other countries affected. Newspaper headlines warned of a repeat of the 1970s Cod War, when Britain was drawn into a confrontation with Iceland over the right to fish in the North Atlantic.

Mr Gove and other leave ministers are keen on restoring Britain’s right to forge free-trade deals around the world. Liam Fox, the trade secretary, is already working on "signature-ready" pacts with a number of trading partners, most notably the Gulf Cooperation Council.

Officials say talks are proceeding well with the GCC but that nothing can been formalised until after the British exit from the EU.

When that will be is unknowable. The deadline for the end of the current negotiations is 2019. The influential chancellor, Philip Hammond wants to agree a long transitional period, when Britain remains in the EU’s customs union.

Mr Hammond has the support of the opposition Labour spokesman Keir Starmer, who has said London should "pay to stay in" the EU’s single market.