The hugely controversial draft withdrawal agreement from the European Commission was revealed in all today.
The text puts into legal terms the Joint Report agreed by Mrs May and European Commission president Jean-Claude Juncker in December, and is due to be agreed by the remaining 27 EU states next month.
Under the Brexit treaty, the UK must agree to abide by the powers of the EU’s bodies, in particular the Court of Justice of the EU, during the implementation period.
And, in a clampdown on the Government’s freedom to make its own decisions during that period, Article 165 of the document makes clear what could happen if the UK fails to follow EU law.
The line states that, should Britain “jeopardise” the internal market, customs union or financial stability of the bloc, “certain benefits” could be suspended.
The treaty states: “The union shall take into account the possible consequences of such a suspension on the rights and obligations of natural and legal persons.
“Any suspension shall be proportionate to the breach of obligation concerned, taking into account the gravity of the breach and the rights in question, and shall not exceed three months. It may, however, be renewed.”
The report adds the UK would have 20 days to “remedy” the situation and avoid a suspension.
On the crucial issue of the Irish border, the draft text spells out in detail how the principle of “regulatory alignment” agreed in December would be implemented if the UK fails to find technological or diplomatic solutions to keeping the border open.
The report suggests EU and UK customs authorities should jointly oversee movements between Northern Ireland and the British mainland, while Europe would retain control over aspects of taxation and state aid in the six counties.
Theresa May said today “no Government could ever agree” to the treaty because of its demands on Ireland.
Answering questions in the Commons less than an hour after the publication of the text, Mrs May told MPs: “The draft legal text the Commission have published would, if implemented, undermine the UK common market and threaten the constitutional integrity of the UK by creating a customs and regulatory border down the Irish Sea, and no UK prime minster could ever agree to it.
“I will be making it crystal clear to President Juncker and others that we will never do so.”
She said she stood by the deal struck in December, but left no doubt that she wants the withdrawal text rewritten, stating that UK negotiators would talk to Brussels about how the Joint Report “should be translated into legal form in the withdrawal agreement”.
But Mr Barnier signalled frustration at the lack of progress in the negotiations, telling a Brussels press conference: “We must pick up the pace.”
He repeated his warning that agreement on the transition deal following Brexit sought by Mrs May is “not a given”.