Finally unveiling the Government’s Brexit ‘White Paper’, ministers confirmed they will seek a Ukraine-style “Association Agreement” with the EU full of legally and politically binding commitments.
They conceded a decision to mirror EU rules on goods could “limit” the scope of free trade deals with the rest of the world.
Firms in the services and digital sector would be exempt as they “matter most”.
And the Government revealed a new UK-EU joint administrative body would have to review all suggested changes to the laws suggested by MPs in Parliament.
Theresa May insisted free movement would end and Britain would take back control of its borders.
But the White Paper outlines a system that will allow the “mobility of people for the provision of services”.
This will allow “talented people” to travel “freely without a visa” on a short-term of temporary basis.
Sources claimed this could last three years – but would be subject to negotiation.
The PM insisted the 100-page document detailed a Brexit vision that strikes a “new and fair balance” of rights and obligations.
And pre-empting criticism from livid Eurosceptics, Mrs May insisted that the UK had to compromise to secure a deal with Brussels.
She said: “We are an outward facing trading nation, we have a dynamic, innovative economy, and we live by common values of openness, the rule of law, and tolerance of others.
“Leaving the EU gives us the opportunity to deliver on that ambition once and for all – strengthening our economy, our communities, our union, our democracy and our place in the world, while maintaining a close friendship and strong partnership with our European neighbors.
“But to do so requires pragmatism and compromise from both sides.”
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She added: “Some of the first proposals each side advanced were not acceptable to the others. That is inevitable in a negotiation.
“So, we have evolved our principles while sticking to our principles. The proposal set out in this White Paper find a way through which respects both our principles and the EU’s.”
Just hours earlier, new Brexit Secretary Dominic Raab signaled that the PM’s so-called ‘red lines’ could be negotiated away in talks with Brussels.
The former housing minister, who was promoted after Mr Davis stood down on Sunday night, said concerns raised by Brussels had been listened to and the government was approaching the talks in a “spirit of friendship”.