MICHEL Barnier has unpicked key parts of Theresa May’s Chequers Plan, suggesting it is unfair, could increase fraud across the continent and posed a threat to the European single market.

After Theresa May urged Brussels to “evolve” its thinking and stop coming up with unworkable proposals, the EU’s chief negotiator underscored the fundamental obstacles to a Brexit deal with just 13 weeks of negotiating time to go.

Speaking after briefing ministers from the EU27 in Brussels, Mr Barnier opened his remarks by saying how the UK’s White Paper had created a way for "constructive discussions" on the post-Brexit relationship between Britain and the EU.

And he indicated Brussels was ready to amend its "backstop" proposals for the Irish border, which have become the biggest stumbling block in the talks.

But for most of his press conference the chief negotiator, without completely dismissing the Chequers Plan altogether, raised serious questions about key elements of it:

*noting how it only included alignment for goods checked at the border, he pointed out how rules on areas like pesticide used in the agri-food sector were not included. “How can we protect consumers in Europe?" he asked.

*pointing to the plan to collect differing tariffs under the UK Government’s facilitated customs arrangement, he asked: "How can custom services verify the final destination of goods so that they apply the right tariff; is there not a major risk of fraud?”

*given the UK wants divergence on services – 80 per cent of its economy – how would the EU avoid "unfair competition?".

Mr Barnier declared: "Our main aim is to protect the EU's single market; to protect what we are.”

Responding to the EU chief negotiator’s remarks, Labour’s Owen Smith, on behalf of the pro-EU Open Britain, said: “Mrs May’s July of horrors just got a lot worse as Mr Barnier made it clear her White Paper was a dead letter.”

Tom Brake for the Liberal Democrats claimed Mr Barnier had systematically torn apart the PM's White Paper and that the prospect of a "catastrophic no-deal Brexit is becoming more concrete by the day".

Earlier in Belfast, the Prime Minister insisted her compromise plan offered a “coherent strategy” and a “practical working solution” to delivering on the 2016 referendum vote to leave the EU.

She made clear any UK Government could “never accept that the way to prevent a hard border with Ireland is to create a new border within the United Kingdom; to do so would also be a breach of the spirit of the Belfast Agreement,” insisted Mrs May.

In Edinburgh, Jeremy Hunt diverged from his Cabinet colleague Andrea Leadsom, the Commons Leader, who made clear that the Chequers Plan was the UK’s “final offer” and that if it were not accepted by Brussels, then there would be no deal.

The new Foreign Secretary described Britain’s White Paper as a “substantive” offer, adding: “It should be the basis upon which a deal can be done. But it’s going to need imagination and flexibility to make sure that we continue to make progress.”

Meanwhile, No 10 brushed aside the claim from Leo Varadkar that British aircraft would be barred from his country's airspace and “would not fly” in the event of a no-deal Brexit.

A Downing Street spokeswoman insisted the Irish Taoiseach was “wrong,” pointing out how so-called "overflight rights" were guaranteed by international treaties rather than EU membership.

Commenting on the day’s developments, Jacob Rees-Mogg, the leader of the pro-Brexit European Research Council, tweeted: “Today's aggressive comments by Messrs Varadkar and Barnier show why we are right to be leaving the mafia-like European Union."