European Council president Donald Tusk has told the UK it must come to an agreement on "people, money and Ireland" before it can start thrashing out a trade deal in Brexit negotiations.
In a statement ahead of a meeting between leaders of the remaining 27 European Union countries, Tusk said the EU will "not discuss our future relations with the UK until we have achieved sufficient progress on the main issues relating to the UK's withdrawal".
EU leaders are expected to agree an approach to Brexit negotiations during today's meeting, which begins at lunchtime. Tusk said talks will take the form of a "phased approach".
"Before discussing our future, we must first sort out our past," he said.
We need to secure the best guarantees for our citizens and their families. Guarantees that are effective, enforceable, non-discriminatory and comprehensive, and which should be accompanied by simple and smooth administrative procedures.
"We should also agree with the UK that all financial obligations undertaken by the EU of 28 will be honoured also by the UK.
"Finally, in order to protect the peace and reconciliation process described by the Good Friday Agreement, we should aim to avoid a hard border between the Republic of Ireland and Northern Ireland."
Tusk's statement echoed comments by German chancellor Angela Merkel yesterday, who hit out at "illusions" over Brexit negotiations.
Speaking at the German Budestag, she said:
We can only do an agreement on the future relationship with Britain when all questions about its exit have been cleared up satisfactorily.
She also said it was unlikely the UK will continue to enjoy access to the Single Market.
"A third state, and that's what Britain will be, cannot and will not have at its disposal the same rights ... as members of the European Union," Merkel said.
Theresa May responded:
“We have seen chancellor Merkel’s comments today. She says the UK has 'illusions' about the process and that the 27 member states of the European Union agree. We can see how tough those negotiations are going to be at times.”