UPDATE 10.30am: European Commission president Jean-Claude Juncker has delivered a fresh rebuke to Theresa May over her Government's handling of the Brexit process.
Mr Juncker said official papers setting out the Government's positions were not satisfactory and it was "crystal clear" that an "enormous amount" of issues needed to be settled before talks on a future trade deal could begin.
Officials from Brussels and the UK were continuing negotiations in the latest round of the withdrawal process, but Mr Juncker's comments are further evidence of the European Union's frustration with the approach being taken by the Prime Minister and Brexit Secretary David Davis.
His comments came after Brussels' chief Brexit negotiator Michel Barnier said he was concerned about the lack of clarity and insisted "we must start negotiating seriously".
Mr Juncker said the UK "hesitates showing all its cards" but added: "I did read, with the requisite attention, all the papers produced by Her Majesty's Government and none of those is actually satisfactory.
"So there is still an enormous amount of issues which remain to be settled.
"Not just on the border problems regarding Ireland and Northern Ireland, which is a very serious problem in respect of which we have had no definitive response, but we also have the status of European citizens living in the UK and UK citizens living on the Continent.
"We need to be crystal clear that we will commence no negotiations on the new relationship - particularly a new economic and trade relationship - between the UK and the EU before all these questions are resolved."
Mr Juncker added: "First of all we settle the past before we look forward to the future."
EARLIER: Brexit negotiations are continuing in Brussels after the EU told the UK it needed to get serious about the withdrawal talks.
Day two of the latest round of attempts to try and hammer out a divorce deal opened after the EU's chief negotiator Michel Barnier accused Britain of ambiguity on key issues like its exit bill and demanded more clarity from London.
He said: "To be honest, I'm concerned, time passes quickly.
"We need UK positions on all separation issues. This is necessary to make sufficient progress. We must start negotiating seriously.
"We need UK papers that are clear in order to have constructive negotiations. And the sooner we remove the ambiguity, the sooner we will be in a position to discuss the future relationship and a transitional period."
Brexit Secretary David Davis hit back by insisting the UK position papers were strong in detail.
He said: "They are the products of hard work and detailed thinking that has been going on behind the scenes not just the last few weeks, but for the last 12 months, and should form the basis of what I hope will be a constructive week of talks."
He said the negotiations would "require flexibility and imagination from both sides", adding: "And we are ready to roll up our sleeves and get down to work again once more."
Tension between London and Brussels centres on the size of the UK divorce payment which EU sources have estimated to be between £50 billion and £80 billion.
The talks came amid reports that Prime Minister Theresa May's visit to Japan this week could lead to disappointment over hopes for early trade deal talks with Tokyo.
The Financial Times said the Japanese government wanted to prioritise completing its planned agreement with Brussels before any future UK arrangements.
Meanwhile, Labour's new Brexit stance was branded "chaotic" by one of the party's Leave supporting MPs.
Blackley and Broughton MP Graham Stringer hit out at a sudden policy shift announced by shadow Brexit secretary Sir Keir Starmer committing the party to keeping the UK in the single market and customs union for up to four years after EU withdrawal in March 2019.
Mr Stringer told the BBC: "What Keir said seems completely at odds with what the leader of the party, the shadow chancellor of the exchequer, have said.
"They have made it quite clear that we cannot honour the decision of the referendum if we remain in the customs union and the single market.
"So, I think it's a bit of chaos at the centre of the party, makes no sense to me whatsoever."
Before the Brussels talks, Mr Barnier used a French newspaper article to state Brexit would have an impact on defence and security matters.
Writing in Le Monde, he said: "It will have very practical consequences, including on defence and security.
"Nevertheless, the union of 27 and the United Kingdom will have to join forces to deal with common threats: the safety of our fellow citizens is not being marketed.
"We will therefore examine in due course the conditions for convergence between the union of 27 and the United Kingdom on security and defence matters."