The European Union wants to negotiate an ambitious trading partnership with Britain after Brexit, but will only do so once divorce issues are settled and on the basis of fair competition, including on tax, food safety and environment standards.

"If we manage to negotiate an orderly withdrawal, to fully respect the integrity of the single market and establish a level playing field, there is every reason for our future partnership to be ambitious. This is our preferred option," Michel Barnier told a conference in Brussels on Monday.

"This is why we have started internal preparations with member states to be ready to talk about the future as soon as we have agreed how to settle the past. The EU will be ready to offer its most ambitious FTA (free trade agreement) approach."