THE UK Government is prepared to consider paying for Britain to have continued access to the European single market post-Brexit, David Davis has said.

The Brexit Secretary also told MPs the UK Government wanted a deal on citizens’ rights within months, stressing how the UK Government's Brexit strategy was "designed to avoid holding anybody to ransom".

His remarks came as Boris Johnson flatly denied claims that he had told four diplomats that he supported the free movement of European Union citizens in and out of Britain.

READ MORE: Chancellor Philip Hammond dashes First Minister Nicola Sturgeon's hope of Scottish Brexit deal

The Foreign Secretary insisted he told four EU member state ambassadors "very clearly" that immigration was good for the UK but that it had got "out of control" and free movement must end.

Despite the denials - with sources close to Mr Johnson describing the claims as a "total lie" – the Secretary of State’s political opponents seized on the row. The SNP’s Stephen Gethins denounced the Foreign Secretary’s “bumbled diplomacy” while former party leaders Ed Miliband and Nick Clegg respectively attacked Mr Johnson for treating voters like "fools" and criticised his "buffoonery".

During question-time in the Commons, Mr Davis, rather than giving a non-committal answer when asked if the UK Government would consider “making any contribution in any shape or form for access to the single market," he suggested it might.

Mr Davis told Labour’s Wayne David: "The simple answer we have given to this before is, and it's very important because there is a distinction between picking off an individual policy and setting out a major criteria, and the major criteria here is that we get the best possible access for goods and services to the European market.

"If that is included in what you are talking about, then, of course, we would consider it."

Labour’s Pat McFadden, a eading supporter of the Open Britain campaign, said the Secretary of State’s remarks was a “rare dose of realism” in the debate.

Downing Street did not resile from the Brexit Secretary’s suggestion, insisting it was “consistent” with previous Government statements, namely that it would be “for the UK Government to make decisions on how taxpayers' money will be spent”.

But markets reacted positively to Mr Davis’s remarks with the pound rising one per cent against the US dollar to 1.26, its highest level in three weeks.

Paying an annual fee to access the single market would be the position which Norway adopts.

READ MORE: Chancellor Philip Hammond dashes First Minister Nicola Sturgeon's hope of Scottish Brexit deal

In 2012, Oslo paid in £245 million a year into the EU budget, making it the tenth largest contributor despite not being a member state. However, it has been estimated that if the UK adopted a similar position, it would pay in more than £31 billion a year, some 94 per cent of what it currently pays in.

In separate Commons exchanges, Mr Davis was urged unilaterally to confirm all three million or so EU citizens living in Britain would have their rights protected; Labour MPs warned their constituents were "deeply distressed" and worried by the uncertainty.

But the Brexit Secretary told MPs several European countries accepted the future of EU citizens in the UK and Britons in member states had to be dealt with simultaneously.

He noted how there would be "nervousness" among Britons living abroad, saying: "We mustn't leave them hanging."

Elsewhere, Andrew Tyrie, the senior Conservative MP, increased the pressure on the Government to reveal if it had made any financial promises to Japanese carmaker Nissan.

Mr Tyrie, who chairs the influential Commons Treasury Committee, has written to Sir Amyas Morse, the head of the National Audit Office, to ascertain whether or not any contingent liabilities had been created in relation to assurances provided to Nissan.

"The Chancellor has not answered the crucial question: whether an assurance was given to Nissan, which could constitute a contingent liability or support consistent with the provisions of the 1982 Industrial Development Act,” said the Chichester MP.

READ MORE: Chancellor Philip Hammond dashes First Minister Nicola Sturgeon's hope of Scottish Brexit deal

In October, Nissan said it was extending production of two new vehicles in Sunderland amid rising speculation that it could ditch the UK following the country's decision to quit the EU.

The move secured 7,000 jobs in the Brexit-backing city but prompted speculation as to whether or not a "sweetheart deal" between the carmaker and the Government had been struck.