MICHEL Barnier, the EU’s chief negotiator, has dismissed Theresa May’s aim of achieving a “frictionless border” after Brexit, claiming it was impossible with Britain outside the single market and customs union.

In comments that are set to enrage the Prime Minister, Mr Barnier said both sides were set for a “loser/loser situation,” making clear to an EU advisory committee in Brussels that there would be “negative” consequences to Brexit and that Britain could not cling onto the benefits of membership once it had left.

Speaking to the European Economic and Social Committee, the EU negotiator said Brussels had made clear to the UK that the EU's "four freedoms" - including freedom of movement - were indivisible; that there could be no sector-by-sector participation in the single market and that the EU would maintain full sovereignty over its own rules and regulations.

"These three points were already made very clear by the European Council and European Parliament but I am not sure whether they have been fully understood across the Channel.”

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He explained: "I have heard some people in the UK argue that one can leave the single market and keep all of its benefits. That is not possible.

"I have heard some people in the UK argue that one can leave the single market and build a customs union to achieve frictionless trade. That is not possible.

"The decision to leave the EU has consequences and I have to explain to citizens, businesses and civil society on both sides of the Channel what those consequences mean for them.

"These consequences are the direct result of the choice made by the UK, not by the EU. There is no punishment for Brexit and, of course, no spirit of revenge but Brexit has a cost, also for business in the EU27, and businesses should assess with lucidity the negative consequences of the UK choice on trade and investment and prepare to manage that."

Mr Barnier stressed that failure to reach a deal on the future EU-UK relationship would mean "a return to the distant past" with trade regulated by World Trade Organisation rules, which would impose tariffs on goods such as vehicles, food and drink.

"No deal would worsen the loser/loser situation which will necessarily be the result of Brexit and objectively the UK would have rather more to lose than its partners," said Mr Barnier.

"There is no reasonable justification for a no-deal scenario; there is no reason further to worsen the consequences of Brexit."

In a warning of the additional costs and administrative burdens which UK exporters were likely to face after Brexit, he said: "Trade will never be as fluid for a country which makes the choice to leave the single market and the customs union.

“Only a combination of the customs union and the rules of the single market make it possible to trade freely without friction between our countries; you don't get the one without the other.

"By choosing to leave the Union, you are moving yourself deliberately outside that external border which is the border of the single market."

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Mr Barnier gave examples of the way in which he believes that "a trading relationship with a country which is not in the EU will involve friction".

UK exporters would face additional red tape over VAT declarations and the exports of live animals and animal products would be subject to border checks, which would pose a particular challenge on the border between Northern Ireland and the Republic.

Labour’s Ben Bradshaw, a leading supporter of the Open Britain campaign, which seeks as close a relationship to the EU as possible, said: “Michel Barnier has exposed how the Government’s rhetoric has no basis in reality. We cannot enjoy the ‘exact same benefits’ and ‘frictionless trade’ outside of the single market and the customs union as we do as members.

“Far from having our cake and eating it, we’re in danger of having slices taken away from us unless the Government starts putting the economy and jobs first in the negotiations.

“Ministers also need to drop the damaging mantra of ‘no deal is better than a bad deal’, when Barnier is clear that no deal is the worst deal of all, which will leave us all poorer,” added the Exeter MP.

Asked about Mr Barnier’s comments, the Prime Minister’s spokesman said the Government had set out its position in its White Paper and in Mrs May’s Lancaster House speech.

“We want a comprehensive free trade agreement and a new customs agreement, that allows for trade as frictionless as possible. Obviously, we are just at the beginning of the negotiations but I would say the most frictionless trade possible between the UK and the EU is in the interests of both sides.”

Asked if Mr Barnier was wrong in his assertions, the spokesman replied: “I have set out what our position is.”