Key among her proposals were that the existing market arrangements continue during the transitional period, pledging that the UK would pay its ‘fair share’ into the EU budget as part of the deal.

‘People, businesses and public services should only have to plan for one set of changes in the relationship between the UK and the EU. So during the implementation period, access to one another’s markets should continue on current terms and Britain should also take part in existing security measures,’ she said.

The deal she proposed could include payments worth €20bn(£18bn) over the two years in an attempt to ensure no EU countries are left out of pocket by the UK’s departure. That payment would not form part of the ‘divorce settlement’ covering the UK's outstanding debts and liabilities to the EU.

She put forward a ‘bold new strategic agreement’ on security co-operation, and added there was ‘no need to impose tariffs where there are none now’.

The speech was intended to end the stalemate in negotiations, which are due to resume on Monday 25 September, six months after Article 50 was activated, signalling the UK’s intention to leave the EU.

The EU’s chief negotiator, Michel Barnier, is expected to release a written response to the speech in due course.

Report by Calum Fuller