Britain's government has been "too slow" in preparing the country for its impeding exit from the European Union and the process could become damaging and unmanageable, the parliament's spending watchdog has warned.

In what will come as yet another chastening appraisal of Theresa May's leadership, the public accounts committee highlighted the government had so far failed to reprioritise its work in order to be ready for Brexit by the end of March 2019.

Tory MP Sir Geoffrey Clifton-Brown, the committee chairman and backer of the Leave campaign, admitted Brexit was a "complicated task with the potential to become a damaging and unmanageable muddle".

The report, which was released on Wednesday (7 February), warns that a number of ongoing programmes are yet to be closed to allow the government to focus on Britain's exit from the EU for the upcoming 14 months.

"It is concerning that government departments still have so far to go to put their plans into practice," he said.

"[The] real world will not wait for the government to get its house in order."

The report found the Department for Exiting the EU (DExEU) has identified 313 separate "workstreams" that will need to be completed and has pledged to make sure plans to deal with them were "up to scratch".

However, the cross-party committee warned the department had been too slow in implementing such plans, adding some "may not be sufficiently developed to enable implementation to start quickly".

Brexit EU Image
An anti-Brexit demonstrator holds the EU and UK flags outside the Houses of Parliament, in central London. AFP/Getty Images

The findings are in line with what Philip Rycroft, DExEU's permanent secretary, told the committeee in December last year, when he admitted the department faced a major uphill task to complete those plans in time.

The report went on to state that by next month all departments should have reviewed their commitments to determine which can be continued over the next 12 months and which will have to be ditched.

"Departments have still not faced up to the need to reprioritise existing activity to make space for Brexit," said the report. "It is clear that prioritisation has not been undertaken with the speed or on the scale needed and we have seen no evidence that departments have stopped any significant work.

"This is worrying as departments do not have the technical, project or senior leadership capacity for Brexit alongside all their other planned activity."

MPs also criticised the government for refusing to disclose important details of the Brexit process, adding that concerns over negotiations "must not be used as an excuse for keeping the public and Parliament in the dark".

The report comes amid reports that the EU could impose severe punishments on the UK if it broke Brexit transition terms.

Under proposals drafted by the European Commission, the EU would have legal powers to suspend access to the single market, slap tariffs on goods and even ground flights that go over EU airspace.

The five-page legal text seen by the Times calls for the EU to be able "suspend certain benefits" as a "nuclear option" if the UK breached a "sincere cooperation" principle, which would be in the final Brexit treaty.