The EU's chief negotiator Michel Barnier has told the UK there is no compromise position on the Single Market or customs union.
Barnier, who was speaking in Italy before joining the latest round of formal negotiations in Brussels, said the UK needed to be aware that any decision to leave the European Union and its existing structures would "have consequences".
He said: "You can not be half in the Single Market and half out.We can not want to put an end to the free movement of people while maintaining the free movement of goods, services or capital through a system of general equivalences. We can not want to leave the internal market and continue to enact the rules. We can not leave the customs union but want to benefit from a free trade with the European Union."
The Eurocrat stressed there was "no reason" for the Single Market to be weakened by Brexit if its integrity was maintained in this way.
He added: "This Single Market, which is our main economic asset, is a set of laws, rules, standards chosen in common - and the United Kingdom knows them well since, for 44 years, we have been deciding them together - and we respect them together, with common institutions and jurisdiction."
Barnier has previously floated the Canadian trade agreement as a model for future trade with the EU, although Theresa May has already rejected it. Instead the British Prime Minister is hoping to secure a bespoke deal, but that appears unlikely.
He also seized on comments made by US commerce secretary Wilbur Ross on Monday, who told the CBI conference that the UK should ditch EU "protectionism", including high food standards and other regulations, and urging a closer convergence with the US.
But Barnier said the future UK-EU would be "more a matter of controlling regulatory divergences than of encouraging convergence".
He added: "The United Kingdom has chosen to leave the European Union. Will she also want to move away from the European model? That's another question... Of course, the UK stays in Europe. But it is up to the British to tell us whether they still adhere to the European model. Their answer is important because it directs the discussion on our future partnership and the conditions of its ratification."