The European Union is preparing for the UK to leave without a deal, a senior official has said.
Stefaan De Rynck said Brussels did not want a “no deal” scenario but it was braced for one.
Mr De Rynck is an adviser to EU chief Brexit negotiator Michel Barnier.
He dismissed claims by David Davis that the EU would push talks on a deal to the wire saying the bloc did not want to “add risk” to the exit process by “playing with time”.
Davis warned over Brexit vote promise
“Brexit is a process we want to manage in a calm and rational way,” Mr De Rynck told a seminar at the Institute for Government think tank in London, adding that failing to reach a deal would harm both sides.
He said: “There is a clear negative impact from no deal, I think that that is clear, for both sides but especially for the UK economy. But it is not a scenario people want to work towards.
“We are preparing for it, that is for sure, at 27 [the other 27 EU states] but it is not a scenario that we in the negotiation room want to bring in that negotiation room.”
He added: “On going to the wire, we would certainly want to avoid that.”
As it stands, the UK will leave the EU in March 2019 whether it agrees a deal on the terms of withdrawal or not. Prime Minister Theresa May has said she believes the two sides will reach a deal but the UK must prepare for all eventualities.
The so-called divorce bill, the amount the UK will pay to settle its liabilities when it leaves the EU, remains a major sticking point in negotiations.
Hopes that negotiations would move on to Britain’s future relationship with the EU this month were dashed after EU chiefs said more work was needed first on the divorce talks.
Mr De Rynck said “sufficient progress is not far away” but the UK must set out how it believes the divorce bill should be calculated to end the deadlock over money.
“In terms of the guidelines for the future relationship as well as the possible transition, all of that can come very quickly,” he said.
Earlier this month, European Council President Donald Tusk said the rest of the EU was not preparing for a no deal outcome.
“EU27 is not working on ‘no-deal’ scenario,” he said. “We negotiate in good faith and hope for sufficient progress by December.”