The European Union wants to be able to restrict the UK’s access to the single market if there is a dispute after Brexit, a leaked document suggests.
The power to suspend “certain benefits” would apply during the post-Brexit transition phase before the final arrangements come into force.
It is revealed in a draft section of the UK and EU’s withdrawal agreement, which has yet to be finalised.
The UK said the document simply reflected the EU’s “stated directives”.
Theresa May is to chair the first of two key Brexit meetings with her senior ministers later as the government faces more calls to clarify the UK’s position.
The first Brexit cabinet committee will focus on Northern Ireland and immigration, while trade will be discussed on Thursday.