The EU will engage in free trade deal talks with the UK only if "sufficient progress" is made in the two-year-long Brexit negotiations, the European Council said on Friday (31 March).
The requirement is part of the draft guidelines released by Donald Tusk, the EU Council president, in reply to Theresa May's Article 50 notification letter. The document was hand-delivered to Tusk by the British diplomat to the EU, Sir Tim Barrow, on Wednesday.
The guidelines, which will be debated by the 27 other EU leaders at a summit on 29 April, also said the economic and political bloc was open to a "transitional" deal with the UK after Brexit.
The proposals come after German Chancellor Angela Merkel and outgoing French President Francois Hollande rejected May's call for an early free trade agreement. The talks "must first clarify how we will disentangle out inter-linked relationship," Merkel said.
The UK government has said it will not seek to maintain Britain's membership of the EU single-market, while seeking a bespoke customs agreement which would allow Whitehall to broker its own free trade agreements.
"These are draft guidelines and we look forward to beginning negotiations once they have been formally agreed by the 27 member states," a government spokesperson said.
"It is clear both sides wish to approach these talks constructively, and as the Prime Minister said this week, wish to ensure a deep and special partnership between the UK and the European Union."
But that plan could be scuppered by pro-EU MPs who have demanded a parliamentary vote on the UK's exit from the European Economic Area (EEA) following the publication of the Great Repeal Bill white paper.
"Ministers have promised a new trading arrangement that delivers the exact same benefits as we have today. Until they show us how they can deliver on that tall order, they should not be cavalier about taking us out of the single market," said Labour's Heidi Alexander MP, a supporter of the Open Britain campaign.
"This is not a decision that should be made by the stroke of David Davis's pen in the bowels of Whitehall. It should be put before people's elected representatives in parliament."
A Department for Exiting the EU spokesperson said: "We will not be a member of the single market or the EEA. Once we leave the EU, the EEA Agreement will no longer be relevant for the UK. It will have no practical effect.
"We therefore do not envisage a vote. We are considering what steps, if any, might need to be taken to formally terminate the EEA Agreement as a matter of international law.
"That is what the Secretary of State was referring to in the House and we will of course keep parliament fully updated."