Theresa May will sit down with her most senior ministers on Monday to discuss what kind of trade deal the UK should have with Europe after Brexit.
It is the first time members of the Cabinet will discuss the final relationship the UK will have with the EU after the Brexit transition period, but comes amid fresh divisions.
At the weekend Chancellor Philip Hammond and Foreign Secretary Boris Johnson set out divergent views of the conditions that should apply during the transition, likely to be between 2019 and 2021.
The meeting on Monday will see ministers start the process of trying to come to an agreed position on how to approach trade talks, with a series of further meetings to follow and a hoped conclusion early in the new year.
One Government source told The Independent: “The process needs to bottom out, in the end what we want to keep the same as the EU, where we want to diverge and what we’re willing to give up.
“There will be a broad consensus arching over that, which people can stick to publicly, but the things that need ironing out are the details of where we eventually diverge with Europe and to what extent.”
Ms May has indicated in the past that the UK will seek a broad free trade agreement with the EU, that maintains the best possible access to the single market.
Mr Hammond, backed by Home Secretary Amber Rudd and Business Secretary Greg Clark are advocating a position close to existing EU systems in order to maximise the economic benefits of the single market.
But Mr Johnson, Environment Secretary Michael Gove, International Trade Secretary Liam Fox and Brexit Secretary David Davis are pushing for a tilt towards global markets.
EU officials have urged the UK to nail down exactly what it wants from the end state before beginning serious discussion on it, with negotiations in the meantime concentrating on the transition.
Even there, difficult battles are still to be fought in the Cabinet, which were highlighted at the weekend.
On Saturday. Mr Hammond said the UK would pursue a two-year transition phase that would “effectively replicate the status quo”.
Speaking while on a trade mission in China, he was asked whether firms should expect a transition deal that would see the UK stay in the single market, customs union and subject to the European Court of Justice.
He answered: “In a word, yes.”
The Chancellor explained: “What they should expect as a result of the agreement we’ve reached this week with the European Union is a transition, or implementation period, which will start at the end of March 2019, during which we will no longer be members of the European Union.
“We won’t technically or legally be in the customs union or in the single market, but we’re committed as a result of the agreement we’ve made this week to creating an environment which will effectively replicate the current status quo, so that businesses can carry on trading with their commercial partners across the EU as they do now.
“Borders will operate as they do now and financial services businesses will be able to carry on conducting their business across borders as they do now.”
But in an interview with The Sunday Times, Mr Johnson said any deal must give Britain “that important freedom to decide our own regulatory framework, our own laws and do things in a distinctive way”.
He said if the UK was forced to mirror EU laws, many people “would say, ‘What is the point of what you have achieved?’ because we would have gone from a member state to a vassal state”.
The EU’s guidelines for the next phase of Brexit talks were set out in Brussels on Friday, after leaders of the 27 other member states agreed to move on to the second stage of the process covering a transitional period and early talks on future trade.
It makes clear that during the transition the EU expects the UK to observe all of its rules – including freedom of movement – and accept the jurisdiction of the ECJ.
