Member states could abandon one of Europe’s ideological red lines in return for more concessions from Prime Minister Theresa May.
A potential deal is on the negotiating table and will be discussed at a special meeting of all 28 EU leaders in Salzburg, Austria next month.
This would mark the first public shift in position from the EU’s chief Brexit negotiator Michel Barnier and the European Council.
Since Mrs May’s new Brexit plan was outlined at Chequers last month, Mr Barnier has continued to claim that her proposals would “undermine our single market” and that Britain can’t cherrypick the parts it wants to be in.
But Britain has insisted that the EU has an almost identical relationship with Jersey and other Channel Island Crown dependencies that hold third-country status for all matters, except goods.
Sources in the Brexit negotiations are confident that European leaders would listen if Mrs May adopted the ‘Jersey model’ in full but Britain would then have to adopt all future EU environmental and and social protections, according to the Times.
It would also require the Prime Minister to shift from her current staunch customs proposals, as the facilitated arrangement has gained little traction.
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Theresa May sent a letter to Tory members in an attempt to reassure them over Brexit
7.15pm update: Brexiteer MEP Steven Woolfe says Brexit is a complete CON
British MEP Steven Woolfe says the UK will not get the Brexit the country voted for, claiming it is ‘a complete con’.
6.40pm update: Tory MP Andrew Bridgen warns allowing EU bullying tactics will have SHOCKING consequences for Theresa May
He accused the EU of bullying tactics during Breit negotiations.
Speaking to Express.co.uk, Mr Bridgen said: “What’s clear is you can’t appease a bully.
“The European Union are trying to bully us and they’ll only come back for more.
“The moment that Theresa May is faced with further concessions than the already very weak Chequers proposals, I think she’ll have a raft of further resignations.
“I think that will be the death knell, not only for Chequers but probably also for the Prime Minister.”
Mr Bridgen also said Mrs May’s Brexit white paper is “wasting time” because there is “no way it’s going through Parliament”.
5.00pm update: New anti-Brexit party is forgetting vital problem, claims professor.
Politics professor Wyn Grant says new party bringing together “disgruntled” Remainer politicians could struggle to appeal to the masses because “there isn’t a great deal of agreement between these parties”.
He added: “One would have to ask what is the programme of this party going to be. Now, ok, it’s largely about Brexit, about having a very soft Brexit and having a second referendum, possibly halting Brexit altogether.
“But when you go beyond that, in fact, there isn’t a great deal of agreement between these parties, liberal democrats have traditionally been very strong on things like human rights.
“The Conservatives are fiscally very Conservative – they want to or have had austerity policies and then you have people like Chuka Umunna who have a very different view about what he wants to do about public spending.
“I have a great difficulty in seeing what the coherence of this party would be once you’ve gone beyond the single albeit important issue of Brexit.”
3.00pm update: British hedge fund manager says sterling will fall further in the run-up to Brexit
While most analysts and investors still expect Britain to secure a trade deal with the EU, Crispin Odey said he was continuing to bet against the pound, a stance that could reinforce the view of some that sterling risks a rapid depreciation as the deadline for an agreement approaches.
He said: “I’ve been short sterling because my sense is that we’ve got to go on our own. All these ‘Remainers’, they will feel it’s the end of the world when we have to go on our own, but that’s when you buy sterling back.”
Matt Drake taking over reporting from Paul Withers
1.46pm update: Irish exporters hit out at new post-Brexit shipping routes
Irish food exporters have been left fuming at plan from the EU to create shipping routes between Ireland and the Continent, deliberately avoiding Britain after Brexit.
The European Commission has proposed new routes between Irish ports in Dublin and Cork, and Zeebrugge and Antwerp in Belgium, as well as Rotterdam in the Netherlands.
Irish haulers have warned the new routes would almost treble transit times, resulting in food spoiling before it even reaches the Continent.
The UK is a major part of the North Sea-Mediterranean Corridor, which links Belfast, Dublin and Cork, with Glasgow, Folkestone and Dover.
In the event of a no-deal Brexit, this route would be closed creating an urgency by the EU’s powerful executive to search out alternatives, leaving Irish hauliers less than impressed.
As it stands, Britain will cease to be a part of the shipping corridor after March 29, 2019, which Brussels warns will “seriously affect” Ireland’s ability to export its products to the Continent.
1.05pm update: Writers attending Edinburgh book festival “humiliated” by visa problems
The UK has been warned that its reputation as a global arts hub could be seriously damaged if problems some overseas artists are having in obtaining visas worsen post-Brexit.
Edinburgh International Book Festival director Nick Barley said one of the writers due in the Scottish capital for the literary celebration, which starts on Saturday, had been “humiliated’ by what they had to go through to get permission to enter the country.
Mr Barley told BBC Radio Scotland: “There was one author, I don’t want to name names, but he told me as well as having to supply his marriage certificate and his daughter’s birth certificate, and three years’ bank statements, he was then told he had to go in for a biometric test to prove he was who he claimed to be.
“He was so humiliated by that he decided he didn’t want to go through with the process of coming to Edinburgh to talk. I persuaded him to stick with it and thankfully we got the visa, but this is just one example of the kind of crazy things people are being made to do in the name of coming to talk about their books.
“The festival is going ahead as normal and we’re trying to resolve these issues, but I worry that is increasingly a problem. This year we’ve got round about 12 authors who have faced serious problems.
“But I think if this goes further we start to damage the reputation of the festivals, and we start to have authors wondering whether they can be bothered to go through that process of applying to come.”
Theresa May will be offered a new Brexit deal, marking a shift in position from Michel Barnier
12.35pm update: London brushing aside Brexit fears
London is shaking off any fears around Brexit, with activity and employment growing faster in the capital than anywhere else.
The faster growth is highlighted by the most recent purchasing managers’ index survey for the second quarter of 2018 after a sluggish 2017 and weak start to the year.
Each quarter, the surveys quiz businesses about output, new orders, employment and prices. A score above 50 indicates growth.
London was more optimistic than the rest of the country, with a score of 56.2 in June – the highest level since October.
Job numbers in the capital rose 1.9 percent from a year ago to 5.9m – the highest since records began.
Across the UK, job numbers grew just 0.5 percent.
12.05pm update: Tory rebels warn May they will block no-deal Brexit
Tory rebels have warned Theresa May that they will block any attempt to exit the European Union without a deal on Brexit.
Conservative MP Stephen Hammond fired the warning to the Prime Minister, claiming that although Tory rebels haven’t had enough support to defeat the Government in recent Brexit votes, that wouldn’t be the case when trying to avoid a no-deal scenario.
He told Business Insider: “There are a number of colleagues who have wanted to give the Prime Minister room and scope to negotiate what her desired outcome is.
“However, they are also colleagues who are clear that if the outcome is a no deal, then they’ll make their view well-known that this isn’t acceptable for Britain.
“No deal is not the default. That will not happen.”
London is beating Brexit fears, with activity and employment growing faster than anywhere else
11.00am update: Pound continues to slide amid no-dea; Brexit fears
The pound continued its downward spiral on Thursday as investors become increasingly concerned about a no-deal Brexit.
The currency fell to its lowest level against the dollar for almost a year, shedding 0.3 percent to leave it at $ 1.28.
Against the euro, it hit a nine-month low as it slipped to €1.10.
Connor Campbell, financial analyst at SpreadEx, said: “The fears of a no-deal Brexit have really gathered steam in the last few sessions, a snowball effect stemming from Mark Carney and Liam Fox’s warnings either side of the weekend.”
10.00am update: May attempts to win around party with reassuring letter
Theresa May has sent a letter to Tory members, insisting her Chequers strategy does not represent a “concession” to Brussels.
In the letter, obtained by the ConservativeHome website, the Prime Minister conceded that last month’s Brexit White Paper had provoked “strong feelings” within the party.
But she insisted the proposals will honour the result of the 2016 referendum and set the UK on course for a “productive relationship” with the remaining 27-member EU.
Mrs May also admitted that talks with the EU had reached an “impasse” as both of the customs union proposals put forward by Brussels were “not acceptable to me or the United Kingdom”.
She wrote: “This vision for our future relationship with the EU will be very challenging for the EU – it is in no sense a concession to their demands.
“I have been very clear that we are rejecting the two models they have put forward. Instead, we are asking them to accept a bespoke model which meets the unique requirements of the United Kingdom.”
Theresa May would have to shift from her current customs proposals if a new Brexit deal was offered
9.30am update: No-deal Brexit would be ‘nightmare’ scenario for insurance sector
A new report has warned that a no-deal Brexit would be a “nightmare scenario” for the insurance sector and must be avoided “at all costs” to safeguard its future.
Global law firm said that slow progressin negotiations have forced many insurance companies to start planning moving their businesses out of the UK.
Interviews with senior industry figures revealed a “gulf” between their preferred Brexit outcome and Theresa May’s Chequers plan.
There was “little – and diminishing – confidence” that the Government will be able to strike a deal providing “sufficient market access” for financial services companies
9.10am update: South West voters back second referendum
Voters in the South West of England have backed a second referendum on a Brexit deal by a margin of 42 percent to 35 percent.
The poll, which saw YouGov question 1,012 adults in the region between July 31 and August 7, showed voters have now swtiched to backing continued EU membership by a margin of 51 percent to 49 percent – despite the Suth West backing ‘Leave’ in the 2016 referendum.
Support for a second referendum rises if the Government fails to secure a Brexit deal with the EU, with 47% backing a public vote in those circumstances and just 27% opposing.
The pound has fallen sharply against both the dollar and euro
8.50am update: Tories facing “devil’s choice” over election and second referendum
Anti-Brexit campaigner Gina Miller claimed the Conservative Party is facing a “devil’s choice” between calling a general election and a second referendum in order to accelerate Brexit negotiations.
Speaking to Krishnan Guru-Murthy on his Channel 4 podcast ‘Ways to Change the World’, she said that the Tory party would be keen to avoid an election — leaving a second referendum – or ‘people’s vote’ — as their only remaining choice.
She made the comments after Mr Guru-Murthy suggested that cross-party fraternisation to bring about a Brexit deal would amount to “political suicide” for MPs.
Ms Miller said: “More MPs are realising they need to put their country before their party, and that this is not about tribalism and how party politics has played out in the past.
“There are lots of problems with an election. Labour, will do everything they can to have an election. The Conservatives, who are deeply tribal, will do everything to avoid an election.
“And they are the ones in power, so if they don’t want an election – and this is going to be, if you like, a devil’s choice for them – then they give it back to the people.”
8.20am update: Number of European buyers investing in UK business rockets
The UK has seen a big increase in European buyers investing in British businesses.
Daniel Domberger, a Partner at international mergers and acquisitions firm Livingstone, argued that the statistics show a tremendous quarter on quarter investment growth despite Remainer claims Brexit will hinder harm UK business.
He said: “The US remains the single largest source of foreign buyers into the UK accounting for about 46 percent of them.
“The next largest is European buyers at about 43 percent.
“Interestingly US interest in the UK has been relatively flat but European buyers acquiring UK businesses increased about 16 percent quarter on quarter in contrast to Germany for example.”
8.00am update: Europe to offer UK new deal
Europan leaders could offer Britain a new Brexit deal that would enable it to remain in the single market for goods while opting out of free movement of people.
Member states could abandon one of Europe’s ideological red lines in return for more concessions from Theresa May.
A potential deal is on the negotiating table and will be discussed next month at a special meeting of all 28 EU leaders.