The transition deal, which aims to avoid a “cliff edge” Brexit which may have a detrimental impact on Britain or Brussels, allows the UK to negotiate and sign trade deals, but leaves Britain unable to implement them.
The strict post-Brexit timetable could hint that Theresa May’s government is seeking to impose its will on the EU to ensure Britain is ready to utilise its newly found freedom outside of Brussels bureaucracy.
May and her allies also believe that any EU member state may have the power to pressure Brussels to meddle in any transition period, meaning the UK could be unsettled by any changes to the deal.
A senior Whitehall official told the Telegraph: “It’s now difficult to see how any interim period could go beyond two years given the threat of legal challenge.”
Although Brussels and Britain both agreed there should be a transition period to ease any economic concerns, just how long any deal should run on for remains to be seen.
Philip Hammond has touted a three year deal which would run until 2022, although it is believed Brexit Secretary David Davis is keen to tighten that timeframe to give it at least a year before the next general election, also scheduled for 2022.
A professor of EU law at Cambridge University warned that allowing any transition deal to drag out post-Brexit could invite a legal challenge.
Catherine Barnard said: “Article 50 says nothing on transition. All it contains is a reference to ‘taking account of the framework for its future relationship with the Union’ but that allows us to read transitional arrangements into that language.
“However if a transition period went on too long, it’s highly likely someone might challenge the legality by arguing this transition has become a de facto trade agreement and is circumventing the requirement that trade deals are negotiated under Article 207 or Article 217 and the legal procedures set out under Article 218.”
Former EU chief lawyer Jean-Claude Piris said the transition deal will be “a matter for both parties to decide”, while others have hinted that 2020 may be the best year as it would stop the UK becoming involved in the next budget deal.
Guntram Wolff, the Director of the influential Bruegel think-tank in Brussels, said: “The main reason why it is difficult to have a transition period longer than 2 years is related to the EU budget.
“During the transition, the UK is likely to continue to essentially pay its EU budgetary contributions as part of the Brexit…