Brexit: Philip Hammond attacks 'very aggressive' EU leaders as arguments begin hours before Article 50 triggered

The Chancellor has accused EU leaders of a “very aggressive” stance on Britain’s £50bn ‘divorce bill’, risking an early collapse of the Brexit talks even before they start.

Philip Hammond sent the clearest signal yet that the Government will refuse to pay the sum demanded by Brussels - threatening a falling-out hours before the Article 50 letter is sent today.

EU leaders have insisted Britain must agree the full bill for its historic and future liabilities before any talks on a future trade agreement can begin.

Refusing to pay raises the odds that Britain will crash out of the EU with the “no deal” threatened by Theresa May, with warnings of huge economic damage.

“I should be very clear that we simply do not recognise the very large numbers that have been bandied about in Brussels,” Mr Hammond told Radio 4’s Today programme.

“I’m not surprised that they have been bandied about. This is after all a negotiation and it’s not at all surprising to me that our negotiating partners are setting out a very aggressive starting line for the discussion.”

Nevertheless, the Chancellor insisted he was “very optimistic” that a comprehensive deal will be struck – slapping down Boris Johnson’s claim that leaving with no agreement would be “perfectly okay”.

Mr Hammond dismissed as “ridiculous” the warnings of customs checks choking British ports, saying: “It’s not in the interests of anybody on the continent of Europe to have lines of trucks.”

And he signalled that EU citizens who arrive in Britain up until Brexit is completed in 2019 will be given the same rights to stay and work as the 3m already in this country.

“We remain full members of the European Union for the next two years, subject to all the rules and obligations of membership,” the Chancellor said.

Gus O’Donnell, the former Cabinet Secretary has warned that Brexit is like “jumping out of a plan flown by the EU leaders”, but Mr Hammond said: “No, I don’t accept that.”

However, he did not deny Britain could be “worse off out”, admitting: “When you go into a negotiation, there has to be give and take on both sides.”

And, on the Foreign Secretary’s willingness to leave with no deal, the Chancellor said: “No, we are very clear that what we are seeking to do here is negotiate a deep and special relationship with the European Union.”

He added: “I’m absolutely confident that we will negotiate a deal with the European Union and I don’t think anybody has any doubt about that.”

Late last year, Mr Hammond publicly challenged Cabinet colleagues to delay completing Brexit, arguing “thoughtful politicians” recognised a transitional deal would be necessary.

But he has since lost Cabinet battles to try to prevent a hard Brexit, weakened by the fiasco of his Budget U-turn over higher National Insurance contributions.

“We are all on the same page now, we all have the same agenda, we are all seeking to get the best possible deal for Britain’” he insisted.

Mr Hammond also hinted at important new revelations about the Prime Minister’s strategy for the talks, when the Article 50 letter is published around 1pm today.

“Of course it will go further in expressing how we want to take the negotiation forward and how we see this negotiation developing,” he said.