In comments which could raise concerns among Tory Brexiteers, members of the European Parliament’s Brexit steering group said Theresa May must strike a deal that resembles the Scandinavian country’s single market membership to get the “implementation period” she desires.
Belgian MEP Philippe Lamberts said: “During the transition period, the UK will be a member in all but name, but it will no longer sit at the two tables where decisions are made; parliament and council.
“It has to be a Norwegian-style deal, it cannot be anything else and this has been agreed in principle.”
He added: “I heard no one disputing this from the UK’s side.”
Elmar Brok, who also sits on the group, said: “We are on the way to making the official proposal, it will outline that it should be like a Norway deal.
“This is the position of all three institutions [of the EU].”
A deal based on Norway’s membership of the European Economic Area (EEA) would entail continued free movement of people and payments to Brussels.
The Prime Minister has already agreed in principle to pay between £35 billion and £39 billion in a Brexit “divorce bill” and acknowledged in her Florence speech in September that during the transition “people will continue to be able to come and live and work in the UK”, although they will need to register with the authorities.
But Jacob Rees-Mogg, the new chairman of the influential European Research Group of around 100 Tory MPs, has demanded that Mrs May ends free movement and takes Britain out of the single market the moment the UK formally quits on March 29 next year.
Meanwhile, there was dismay that the City of London has been “kept in the dark” about the Government’s plans to get a Brexit deal for financial services, seen by many as crucial for the economy.
Commons Treasury Committee chair Nicky Morgan said: “The failure to publish a position paper on financial services sends all the wrong signals.
“Financial services will be one of the most challenging elements of the Brexit negotiations. A paper articulating a clear sense of direction, and a desired end-state, could have boosted confidence that the Government is up to the task.
“Some level of clarity has been provided for numerous sectors. Financial services firms will be seriously concerned at the chronic state of uncertainty.”
Catherine McGuinness, the policy chairman at the City of London Corporation, said: “It has always been our expectation there would be a position paper. When so many other sectors and issues have been given this clarity, the City is left in the dark.”
Elsewhere, the former chancellor Lord Lawson of Blaby said civil servants would try and “frustrate” Brexit because “the idea that any bureaucrat could be in favour of radical change is a nonsense”.
He told BBC’s Newsnight: “The officials will do their best to frustrate this process because it goes against the grain so fundamentally. But they equally realise their constitutional duty to accept the leadership of the politicians, of the elected government.”
But Cabinet Secretary Sir Jeremy Heywood said the civil service was supporting the Government in delivering the mandate it has from the Brexit referendum.
He told the programme: “The civil service is putting enormous effort and many of its very best people into making a success of the project. It is being tested on a daily basis and I am very proud of what we have – so far – delivered. Morale is at record-levels, proving once again that the civil service is at its very best when under pressure.”