The UK is reportedly toying with the option of refusing to pay its debts to the European Union after Brexit if Brussels continues its hostile treatment over a future free-trade deal, according to three senior U.K. officials.

Under EU law, Brussels cannot agree a trade deal with the U.K. until it has left the trading bloc. However, this places the UK in an awkward position as the a Prime Minister will have to sign the “divorce” papers without any idea of how the future relationship will look. The EU, resolute in its position, appears unable to see how this is unpalatable to British MPs, who believe there needs to be some form of agreement on how the relationship will look after March 2019.

A senior official, who has refused to be named, has said that Brussels needs to realise that without an idea of what the future relationship will look like, the UK Parliament will vote down the exit treaty and therefore un-do two years of negotiations.

In order to negate this possibility,  the UK negotiating team is eyeing up a contingency plan to hold back approximately £42bn in Brexit payments, if the European Union refuses to give the U.K. the trade deal it wants. Members of Theresa May’s team, frustrated by the obstinacy of Brussels, have reportedly met in private to discuss how such a plan could be put into practice if needed.

The proposal is reportedly only being viewed as an “in case of emergency” plan by those in Whitehall. One official has said, “it’s becoming evident that many EU member states understand the mutual benefit of us achieving a comprehensive free-trade agreement and so [a deal is] very likely…However, an unwillingness to pursue that course of action will mean the U.K. is forced to withhold its financial contributions as agreed in Phase 1 — because nothing is agreed till everything is agreed.”
This message is loud and clear; play fair or we won’t pay up. This is a very drastic move but it raises questions about the EU’s approach to Brexit. The UK is clearly so frustrated by a sense of stubbornness and a lack of understanding from the EU that they are prepared to hold this bomb under their sleeve. The EU is clearly so determined to uphold the “EU Project” that they are prepared to push the UK up against the wall despite it not being in their own best interests. Developments over the next few weeks will be interesting to watch, will the EU finally be able to have a rational and sensible discussion, or will it continue to blindly punish the UK without being aware of the consequences.