Brexit: PM bids to break deadlock with two-year deal offer
Brexit: Theresa May sets out UK offer to break deadlock
(about 3 hours later)
Theresa May will tell EU leaders there is a shared responsibility to make Brexit work "smoothly" as she attempts to break the deadlock in negotiations.
Theresa May has set out proposals for a two-year transition period after Britain leaves the EU in March 2019.
In a speech in Florence, the UK prime minister will say history will judge Brexit on the vision showed, not differences faced.
She wants existing EU market access arrangements to apply during that period and promised Britain would pay its "fair share" into the EU budget.
The BBC understands she will propose a two-year transitional deal, after March 2019, ahead of a permanent trade deal.
She said the UK will be the "strongest friend and partner" of the EU after Brexit.
It could include payments worth 20bn euros (about £18bn) over the two years.
The speech in Italy was aimed at breaking the deadlock in Brexit talks, due to resume on Monday.
BBC assistant political editor Norman Smith said Mrs May was expected to put an offer on the table to try to get Brexit negotiations - due to resume on Monday - moving.
The deal she proposed could include payments worth 20bn euros (about £18bn) over the two years.
It is understood Mrs May will make what has been described as an "open and generous" offer, potentially worth 20bn euros over the two years - which could plug a black hole in the current EU budget, which runs to 2020 created by the UK's departure in 2019.
The PM proposed a "bold new strategic agreement" on security co-operation and said she was optimistic about a "defining moment" in UK history.
Analysis
On trade, she said the two sides could do "so much better" than adopt existing models and there was "no need to impose tariffs where there are none now".
By Laura Kuenssberg, BBC political editor
In a wide-ranging speech, Mrs May also said:
Do expect Theresa May's first admission that the UK will ask the EU for as long as two years to make our complete exit.
Negotiations are due to resume on Monday but so far the two sides have not reached agreement on the issues of the rights of EU and UK citizens, the financial settlement or the Irish border issue.
Two years during which we might pay billions to keep our existing ties with the single market. Two years, after 2019, that could give business breathing space.
Mrs May opened her speech by saying Brexit was a "critical time in the evolution of the relationship between the United Kingdom and European Union".
But this could frustrate some voters who chose to leave, who may see departure now only in the distance.
She said if "we open our minds to new thinking and new possibilities we can forge a brighter and better future for all our peoples".
Don't expect chapter and verse on the future relationship. There is not yet a clear agreement in cabinet on its shape and style, even if the prime minister herself had a fully fleshed-out vision.
Some voters were worried about the prospect of Brexit - but others found it an "exciting time," she said.
But there is hope in government circles that the offer could unblock the Brexit negotiations.
"I look ahead with optimism, believing that if we use this moment to change not just our relationship with Europe but also the way we do things at home - this will be a defining moment in the history of our nation"
There are also expected to be additional guarantees for EU citizens that could help, before the two sides are due to sit down again for official talks next week.
Read more from Laura
Mrs May is not expected to spell out exactly how much the UK will pay or suggest that it is only being given in return for continued access to the single market.
According to pre-released excerpts, she will say that a successful final agreement is in everyone's interests.
"If we can do that, then when this chapter of our European history is written, it will be remembered not for the differences we faced, but for the vision we showed; not for the challenges we endured but for the creativity we used to overcome them; not for a relationship that ended but a new partnership that began."
She is expected to say, if the UK and EU can be "imaginative and creative" about establishing a new relationship, both sides can be "optimistic about the future".
Mrs May will argue that it is "in all of our interests for our negotiations to succeed… so I believe we share a profound sense of responsibility to make this change work smoothly and sensibly, not just for people today but for the next generation who will inherit the world we leave them".
The 20bn euro offer is meant to ensure no EU countries are left out of pocket by Britain's departure.
The 20bn euro offer is meant to ensure no EU countries are left out of pocket by Britain's departure.
But it is not part of the "divorce bill" covering the UK's outstanding debts and liabilities to the EU, which will still have to be agreed with EU negotiators, meaning the final bill for Brexit could be far higher.
But it is not part of the "divorce bill" covering the UK's outstanding debts and liabilities to the EU, which will still have to be agreed with EU negotiators, meaning the final bill for Brexit could be far higher.
The prime minister is also expected to say something about the rights of EU citizens living in the UK - the EU wants them to be continue being protected by the European Court of Justice, but the UK wants them to be subject to UK law only - something that has proved a major sticking point in the talks.
The EU's chief Brexit negotiator Michel Barnier said on Thursday he was awaiting "clear commitments" from the UK on the citizens' rights issue, the divorce bill and the Northern Ireland border.
The EU's chief Brexit negotiator Michel Barnier said on Thursday he was awaiting "clear commitments" from the UK on the citizens' rights issue, the divorce bill and the Northern Ireland border.
'Cold water'
Without those issues being resolved in a withdrawal agreement, there would be no transition deal, he said. Mr Barnier is expected to release a written statement on Mrs May's speech later.
Without those issues being resolved in a withdrawal agreement, there would be no transition deal, he said. Mr Barnier is expected to release a written statement on Mrs May's speech later.
Eurosceptic Conservative backbencher Bernard Jenkin told the BBC: "I don't think the prime minister is going to be greeted with open arms by our European partners because they are still very cross that we are leaving ... they are going to pour lots of cold water on this speech and it's going to look as though little progress is being made.
"But just remember that France, Germany, Italy, these countries do not want the disruption that might arise if we leave without a deal. And we are making it clear that sufficient progress has been made ... that they can now move to the substantial negotiations about what kind of relationship the EU wants with the United Kingdom. So far they've refused to talk about that."
