THERESA May has told MPs there might be “limited circumstances” when it is in Britain's interest to agree to a short extension to the 21-month transition period after December 2020.

In a Commons statement following last week's EU summit in Brussels, the Prime Minister suggested there were now two main options to resolve the Irish backstop issue; the last main obstacle to getting a deal with 95 per cent of the withdrawal agreement completed.

With a Northern Ireland-only backstop off the table as far as Britain was concerned, Mrs May claimed there had been a “substantial shift” in Brussels’ position on the UK’s plan for a UK-EU joint customs territory and that the EU27 was now actively working on the proposal.

She also said the alternative to having a backstop was to extend the transition or implementation period, which is due to end in December 2020.

While she said she was not committed to extending the transition period and remained confident a deal on the future partnership could be agreed by the end of it, the PM explained how there were “limited circumstances” in which it could be argued that an extension “might be preferable if we were certain it was only for a short time”.

She pointed out: “A short extension to the implementation period would mean only one set of changes for businesses at the point we move to the future relationship. But in any such scenario we would have to be out of this implementation period well before the end of this parliament;” ie by May 2022.

Some Conservative MPs fear extending the transition period will mean British taxpayers paying billions more pounds into EU coffers.

Scottish Tories are also worried there will be no exemption for the UK’s fishing industry, which would mean at least another year when Scottish fishermen would have to shadow the EU’s hated Commons Fisheries Policy[CFP] because quotas are set in December for the following year.

Asked by Sheryl Murray, the Cornwall Conservative MP, if UK fishermen would be subjected to an “additional 12 months in the CFP with the crumbs that Europe throws to us during any extended implementation period,” Mrs May replied: “The interests of fishermen throughout the UK and their concern to be out of the CFP is one of the key issues that are at the forefront of our thinking…

“I also recognise the timing of negotiations on fishing has a particular impact here. Access to waters for 2021 will be determined in December 2020 and that is an aspect we have already taken into account in our negotiations with the EU.”

Asked by Andrew Bowie, the MP for West Aberdeenshire and Kincardine, if she was as “invincibly confident” as her Cabinet colleague Michael Gove that the UK would be an independent coastal state by December 2020, the PM replied: “I am confident because I am confident that we can negotiate our future relationship such that it comes into place on January 1 2021.”

But Scottish Tory MPs privately said they were not convinced by Mrs May’s answers. One noted: “I’m not reassured in the slightest by the PM’s words; I don’t think my Scottish colleagues are either. I don’t know where they are going on this.”

Earlier, Jeremy Corbyn for Labour said the latest Government strategy to extend the transition period was an "utter shambles" and Mrs May and her colleagues had shown themselves to be “terminally incompetent” in the Brexit talks.

Ian Blackford, the SNP’s Westminster leader, claimed Mrs May had returned from Brussels “utterly humiliated”.

He added: “As the clock ticks down with just a few short months before the UK is scheduled to leave the EU, with Chequers shredded, the UK has no plan to break the impasse, no plan as we head ever closer to the cliff-edge. Why? Because the PM is humiliated and hamstrung by the extreme Brexiteers in her own party."