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EU officials are preparing for a British walkout as talks open in June and insist their side will not blink if the UK Government chooses to leave the EU without a deal.
Michel Barnier, the EU’s lead negotiator, is said to be drawing up a settlement that will be a precondition for any trade deals.
The alleged ultimatum comes as Brussels claims Britain has financial liabilities to settle with the EU, although the final amount is yet to be agreed upon.