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Ministers believe that Britain and the EU will not be able to sign a post-Brexit trade deal before the end of the transition period. According to a recent report by The Telegraph, the Government is working under the assumption Britain will trade with Europe on World Trade Organisation terms after December 31. UK and EU negotiators began the latest round of talks in London on Monday, but remain deadlocked on key issues such as the level playing field guarantees, fishing rights and the Northern Ireland border.

Senior sources said there was now an assumption that “there won’t be a deal”, but it remains possible that a “basic” agreement could be reached if the EU gives ground in the autumn.

The current round of formal talks between David Frost, the UK’s chief negotiator, and his EU’s counterpart Michel Barnier are due to finish today, but neither side is expecting a breakthrough.

As the clock ticks down and tensions are set to rise, unearthed reports shed light on the EU’s negotiating strategy.

According to a throwback report by the Daily Express, in 2017, former Prime Minister Theresa May criticised EU officials for their “dirty tricks”.

It came after she hosted former President of the European Commission Jean-Claude Juncker in Downing Street, and a partial account of that meeting was leaked to the German press.

According to the report, the talks broke up after Mrs May flatly refused to accept EU demands for a swingeing exit fee from British taxpayers of up to £50billion.

Mr Juncker was said to have hit back by insisting that the EU was not “a golf club” of which the UK could simply walk out.

Insiders said Mr Juncker left the meeting casting doubt about the chances of the EU agreeing a trade deal with the UK, telling her: “I leave Downing Street 10 times as sceptical as I was before.”

Mrs May was understood to be furious at the one-sided nature of the leak, which is thought to have been briefed by sources at the Commission.

Downing Street took the highly unusual step of releasing a statement questioning the account.

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A spokesman said: “We do not recognise this account. As the Prime Minister and Jean-Claude Juncker made clear, this was a constructive meeting ahead of the negotiations formally getting under way.”

And on the 2017 General Election campaign trail in Lancashire, Mrs May signalled her displeasure at the leak.

She said: “I have to say from what I have seen of this account, I think it is Brussels gossip.”

She pointed out that an official statement from the Commission had praised the “constructive” atmosphere of the meeting.

Mrs May added: “But this also shows that actually these negotiations are at times going to be tough. And in order to get the best deal for Britain, we need to ensure we’ve got that strong and stable leadership into those negotiations.

“As I say, every vote for me and my team will strengthen my hand in those negotiations.

“And when it comes to June 8, people will have a clear choice. With 27 European countries on one side of the table, who do they want to see standing up for Britain on the other side – me or Jeremy Corbyn?”

Senior Tory sources accused the European Commission of “spin” in the way the account was briefed.

And diplomats feared the readiness of the Commission to leak and manipulate the proceedings of private talks did not bode well for the coming wrangle over Brexit.

According to the German newspaper, the Downing Street dinner had gone “very badly” and broke up after just 90 minutes.

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Mrs May and former Brexit Secretary David Davis had faced Mr Juncker and Mr Barnier over the meal.

At one point, the Prime Minister was reported to have told the EU pair: “Let us make Brexit a success.”

Mr Juncker was said to have replied curtly: “This cannot be a success.”

Mrs May then clashed with the former European Commission chief over demands for Britain to pay an EU divorce bill of up to £50billion.

She insisted that Britain was not legally obliged to pay a penny because EU treaties contained no rules about an exit fee.

The German newspaper said that when Mr Davis insisted that Britain could not be forced to pay cash to Brussels once the country had left the jurisdiction of the European Court of Justice, Mr Juncker responded that the UK would not get a trade deal as a result.

After the meal, Mr Juncker was said to have telephoned German Chancellor Angela Merkel to complain that Mrs May was “living in another galaxy” and was “totally deluding herself”.

Senior Tory Steve Baker, former chairman of the European Reform Group of MPs, said: “The Commission issued an on-the-record statement describing the meeting as ‘constructive’ so we do not recognise this anonymous briefing.

“We have always expected tough talk and robust positions before the negotiations.”

Former Ukip MEP Gerard Batten claimed Britons would have not been “bullied” by Brussels.

He added: “The outcome of this ill-tempered spat is to make ‘no deal’ more likely.”

Mr Juncker’s ex-chief of staff Martin Selmayr was accused of leaking the unflattering account of the meal.

However, Mr Selmayr denied the accusation and said he and his boss had “no interest in weakening” Mrs May.

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