DAVID Davis has expressed confidence that the Brexit negotiations will continue as planned after suggestions were made that Brussels could delay trade talks for several weeks because of a lack of progress on settling the "divorce" bill.

The upbeat assessment by the Brexit Secretary came as Karel De Gucht, the former EU trade commissioner, claimed that the UK would not be able to strike a trade deal with the US during any transitional period.

UK Cabinet ministers now appear agreed that a transitional deal or “implementation period,” lasting up to three years to the next General Election, might be necessary. But the likes of Mr Davis and Liam Fox, the Trade Secretary, will be looking to seal trade deals as quickly as possible once Britain formally leaves the EU in March 2019.

In the Belgian capital, reports claimed Michel Barnier, the EU's chief negotiator, had told a private meeting of ambassadors that the next phase of negotiations would be delayed by two months because of the wrangle over how much the UK owed the bloc.

It was suggested Mr Barnier said the EU would not talk about trade or the UK's future relationship with Brussels until "sufficient progress" had been made on the exit payment, citizens' rights and the Northern Ireland border issue.

The EU had planned to assess whether the negotiations could move on to post-Brexit trade relations in October but this, it was claimed, could now slip back to December.

However, the Brexit Department made clear the UK Government expected the next stage to begin in October as planned.

"Negotiations to leave the EU are under way and we have already made good progress on a number of issues,” said a departmental spokesman.

"As the Secretary of State said, it is important that both sides demonstrate a dynamic and flexible approach to these negotiations.

"Government officials are working at pace and we are confident we will have made sufficient progress by October to advance the talks to the next phase.”

He added: "On the financial settlement, we have been clear that we recognise the UK has obligations to the EU and that the EU also has obligations to the UK."

Mina Andreeva, for the European Commission, would not be drawn on what was said at the meeting with ambassadors.

At a press briefing in Brussels she pointed out that Mr Barnier had publicly acknowledged that "so far limited progress has been achieved in the negotiations" but EU officials were ready to work on the issues over the summer if the UK side provided further updates.

"President Juncker[the Commission President] has asked, specifically, the taskforce on Article 50 to be ready every day throughout the coming weeks, throughout the month of August, to engage with our British counterparts should the UK wish to substantiate their position in some of the cases where it has not happened yet," she said.

"The commission stands ready, we are ready to work and I cannot, beyond that, speculate on any timetable because that will depend on the pace of the progress being made,” added Ms Andreeva.

Earlier, Mr De Gucht argued that Brussels would not allow Britain to begin trade deals during any implementation phase post Brexit.

He said: “I presume the EU will say: 'Look, as long as you are part of the European Union and part of the internal market - because that's what you would like to be during the transition period - you are not going to enter into trade deals that are competitive with us."

Mr De Gucht also suggested that Britain's assurances to Nissan could affect a free trade deal with the EU.

The car manufacturer announced last year that it was investing in production of new Qashqai and X-Trail models in Sunderland after receiving Government assurances that EU withdrawal would not affect the plant's competitiveness.

The former trade commissioner said there were "doubts in Brussels whether this is in conformity with state aid rules".