Brexit - as it happened: David Davis hails 'significant step' as UK and EU strike draft transition deal

The pound jumped by almost 1% against the dollar to 1.40 US dollars following the news. Sterling was trading up 0.7% against the euro at 1.14 euros.

David Davis says preventing an Irish border is a "priority" for both Governments. He says "I don't know what more I can say" to assure you we will protect the Belfast Agreement.

Michel Barnier says the EU "absolutely respects the constitutional order of the UK" and it is possible to find a solution. He insists "nothing is agreed until everything is agreed" - including the transition period.

Asked about Gibraltar, David Davis says the agreement does cover The Rock and "constructive" negotiations are going on with Spain.

Michel Barnier says that Gibraltar will leave the EU when the UK does, and discussions are ongoing.

The news conference has now concluded.

Theresa May has responded to the news of the transition deal.

The Prime Minister said: "I think the message people can take from this is that prior to December people questioned whether we would get agreement then. We did. People questioned whether we would get agreement now. We have.

"I think what this shows is that with good will on both sides, working hard, we can get an arrangement for the future which will be in the interests of the UK and in the interests of the European Union and it will be good for all parts of the UK."

Britain and the European Union have agreed the terms of the Brexit transition period during which the UK will temporarily remain in Brussels’ orbit after leaving the EU.

The two sides reached a compromise, with the EU saying it would allow Britain to sign its own trade deals during the transition, and the UK caving in on full free movement rights for EU citizens who arrive during the period, as well as automatically implementing new EU rules drawn up without UK input.

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Reaction is starting to come in to the transition agreement between the UK and the EU.

Shadow Brexit SecretaryKeir Starmer said: “This agreement could have been signed months ago but ministers wasted time fighting among themselves, holding out on negotiating objectives that they have failed to achieve and pursuing their reckless red lines.

“Labour was the first to call for sensible transitional arrangements because it is the only way to protect jobs and the economy. 

“It is welcome that they have finally struck a deal on transition and now the Government must prioritise negotiating a final agreement that protects jobs, the economy and guarantees there will be no hard border in Northern Ireland.”

Best for Britain chief executive Eloise Todd said: "As David Davis heralds in his transition deal today it begs the question, is this really worth it? 

"This exciting Brexit future is looking less and less like a global Britain heading for the sunlit uplands and more and more as though it will consist of ministers going cap in hand to Donald Trump for crumbs.  

"Far from taking back control this deal signs us up to something that looks very similar to EU membership until 2020, yet we won't have any say over the rules of the club in that period. 

"Today's announcement still leaves huge question marks over the border in Northern Ireland, risking the peace of our nation, and continues to leave the people of Gibraltar in an unacceptable political limbo.

"This damaging Brexit process could leave us in a situation where we leave one union and threaten another.  

"We could be in the perverse situation that the DUP are kept within the rules of the EU despite wanting to leave - and Scotland, who wanted to remain, are forcibly removed."

Businesses have cautiously welcomed the transition news from Brussels, as many have been concerned about the lack of clarity on Brexit plans.

Dr Adam Marshall, Director General of the British Chambers of Commerce, said: “This is a milestone that many businesses across the UK have been waiting for. The agreement of a status quo transition period is great news for trading firms on both sides of the Channel, as it means that they will face little or no change in day-to-day business in the short term.

“While some companies would have liked to see copper-bottomed legal guarantees around the transition, the political agreement reached in Brussels is sufficient for most businesses to plan ahead with a greater degree of confidence."

Allie Renison, Head of Europe and Trade Policy at the Institute of Directors, said: “Business leaders will welcome the announcement of a provisional agreement on an implementation period and congratulate the UK Government for heeding the call of business and making it a priority early on.

"Knowing that trade and immigration arrangements will continue unchanged until at least the end of 2020 will allow business operations and investment decisions to carry on without unnecessary disruption for the time being.

“We hope that the EU summit this week will not be seen as an opportunity for political leaders to muddy the waters of this deal as agreement on transition is vital for businesses across Europe.

“We are, however, concerned that not enough attention is being given now to the finer details and practical implications of transition."

Several urgent questions coming up this afternoon in the Commons.

Theresa May expects Cambridge Analytica and Facebook to “cooperate fully” with the Information Commissioner’s investigation of allegations that users’ personal data was taken without their consent.

“The allegations are clearly very concerning. It is essential that people can have confidence that their personal data will be protected and used in an appropriate way”, the Prime Minister’s spokesman said on Monday.

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Scottish Conservative leader Ruth Davidson has said she could not support a Brexit deal that fails to give the UK full control over fish stocks after Brexit.

In a statement, Ms Davidson said the agreement between the UK and the EU "falls short" of what fishing leaders expected. The Edinburgh Central MSP is an increasingly influential figure in the party, after reviving Tory fortunes north of the border.

Here's her full statement:

During these negotiations, we wanted to gain control over our waters from as early as the end of next year.

The EU was not willing to move on this. That we now have to wait until 2020 to assume full control is an undoubted disappointment.

Having spoken to fishing leaders today, I know they are deeply frustrated with this outcome.

There is no ignoring the fact that this falls short of what they had hoped for in the short-term.

I’ve made clear to them that I will continue to do everything in my power to ensure their interests are protected during the implementation period and beyond.

Any attempt by the EU to use the implementation period to weaken their hand would be a breach of the agreement.

Over the long-term, today's agreement makes clear that, from 2020, the UK will be an independent coastal state, deciding who can access our waters and on what terms.

I am more determined than ever to ensure that this long-term prize for our fishing industry is seized.

So I should make it clear today that I will not support a deal as we leave the EU which, over the long-term, fails to deliver that full control over fish stocks and vessel access.