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Irish border 'most sensitive' Brexit issue: Incoming EU president Joseph Muscat

EU leaders are not bluffing over Brexit, Maltese PM warns Theresa May

The question of the border between Northern Ireland and the Republic is the "most sensitive" issue in the Brexit negotiations, the incoming president of the EU has warned.

Maltese PM Joseph Muscat, whose country assumes the EU's presidency in January, told the BBC that a range of issues would have to be settled once Theresa May triggers Article 50 - marking the start of the formal withdrawal process - before there could be agreement on a new trade relationship.

They included the bill the UK would have to pay before leaving, establishing what will happen to the border with Ireland and working out interim arrangements on issues like security.

There is a political willingness to have it resolved," he said.

"Only after the first two areas are resolved that third - what relationship we will have with the UK can then be resolved."

Mr Muscat also said the UK cannot remain in the EU single market unless it continues to accept free movement of people and doubted Article 50 would be triggered in March.

He said he would "not be surprised" if legal proceedings delayed the start of Brexit negotiations beyond this date, particularly if the Government's appeal against a ruling requiring it to seek parliamentary approval is referred from the Supreme Court to the European Court of Justice.

He said EU leaders were not bluffing when it came to the issue of free movement.

"This is really and truly our position and I don't see it changing," he said.

Asked about a suggestion that Britain could remain in single market and place limits on the freedom of movement of EU citizens, Mr Muscat said: "It's just not happening."

"All of us have been pretty clear in our approach that we want a fair deal for the UK but that kind of fair deal can't translate itself into a superior deal," he said.

"I know that there is absolutely no bluffing from the European side, at least in the council meetings I have attended, saying 'we will start in this position and then we will soften up'. No, this is really and truly our position."

He acknowledged the talks could get "complicated" and that both sides stood to lose as a result of the UK vote to leave.

"We are going to lose something but there will not be a situation when the UK has a better deal than it has today," he said.

A Downing Street spokesman responded: "This is a negotiation that will take place next year and the Government will set out its negotiating strategy in the fullness of time.

"The aim of that negotiation is to get the best possible deal for Britain, for British companies to access and work with and within the single market and for European businesses to have the same access here."

But the Number 10 spokesman said: "The timetable remains to trigger Article 50 by the end of March next year."