EUROPEAN Union leaders will today adopt a tough line on the forthcoming Brexit negotiations, making clear Britain will have to settle its Brussels bill before beginning talks on a future trade deal.

Donald Tusk, President of the European Council of leaders, who will chair their meeting in the Belgian capital, has made clear that agreement on "people, money and Ireland" must come first, before negotiations on the UK’s future relationship with the EU27.

Only once sufficient progress has been made on key exit issues would EU leaders open talks on trade, he made clear, declaring: “In other words, before discussing our future, we must first sort out our past."

EU officials have estimated that the UK faces a bill of €60 billion or £50bn because of EU budget rules. But UK ministers have been equally adamant the the UK Government will not pay any sum of this size and certainly not upfront.

Mr Tusk's call for a "phased" approach to Brexit echoed Angela Merkel's priorities, which she set out on Thursday when the German Chancellor warned Theresa May and her colleagues against harbouring any “illusions” about getting favours from the EU.

The European Council President made clear that as well as outstanding financial obligations, a deal on the rights of EU citizens living in the UK and Britons living in the rest of the bloc must be reached.

He also called for action to avoid a hard border between Northern Ireland and the Irish Republic.

Mr Tusk said this approach was "not only a matter of tactics but - given the limited time-frame we have to conclude the talks - it is the only possible approach".

In a letter to EU leaders ahead of today’s meeting, he wrote: "Only once we collectively determine in the European Council that sufficient progress has been made on all these issues, will we be in a position to hold preparatory talks on the future relationship with the UK.

"I would like us to unite around this key principle during the upcoming summit, so that it is clear that progress on people, money and Ireland must come first. And we have to be ready to defend this logic during the upcoming negotiations," added Mr Tusk.

Meantime, it has been suggested that Enda Kenny, the Irish Taoiseach, is set to ask his EU partners to back the idea that Northern Ireland would automatically join the EU if it voted to unite with the Republic. However, diplomatic sources have made clear Irish unification is not expected.

Elsewhere, the Prime Minister, hosting her Japanese counterpart Shinzo Abe in Chequers, said after the bilateral: “I have reaffirmed the UK's desire for an enduring, deep and special partnership with the EU, including a bold and ambitious free trade agreement which gives British companies the maximum freedom to trade with and operate within European markets and allows European businesses to do the same in Britain.”

She said she had updated Mr Abe on the UK’s preparations for Brexit and reiterated the UK Government’s determination to make sure Britain remained the best place in Europe to run and grow a business, whether it was one operating at home or abroad.

Looking ahead to the G7 summit in Italy next month, Mrs May said: “We will once again push to lower barriers to trade and create economies that share the benefits of globalisation across our two countries.

“And on migration we agreed that we need an international approach that is in the interests of all those involved and that protects men, women and children from trafficking, sexual violence and labour exploitation.”

On North Korea, she said she condemned Pyongyang’s “belligerence,” saying: “Their nuclear and missile tests are a violation of United Nations Security Council resolutions and international obligations and a risk to global peace and stability.”

Mrs May added: “Prime Minister Abe and I have agreed that we will continue to work with our international partners to maintain pressure on North Korea and counter the security threat posed by its illegal pursuit of nuclear weapons and work towards a peaceful solution.”