Britain is heading for a series of clashes with Brussels, after ministers from the 27 remaining member states agreed proposals which would require the UK to obey the EU rule-book in full for around two years after Brexit.
Downing Street acknowledged there were "differences" between London and Brussels over the nature of the "transition period" following the official date of Brexit in March 2019.
And horrified Brexiteers urged Theresa May to reject the "ultimatum" set out in the negotiating mandate detailing the deal chief EU negotiator Michel Barnier will seek in talks expected to last until March.
The document, agreed in a meeting lasting just two minutes in Brussels, includes proposals for:
- A transition period of 21 months, ending on December 31, 2020, rather than the "implementation period" of around two years favoured by Mrs May;
- The cut-off date for EU citizens to enjoy full rights in the UK to be the end of the transition in December 2020, rather than March 2019 as suggested in the agreement on phase one of the Brexit talks last month;
- Britain to be required to obey all existing EU rules and regulations - including free movement of people - during transition, as well as any new laws agreed by the 27 after the UK has been removed from decision-making bodies;
- The UK to continue to comply with EU trade policy until the end of transition, meaning it cannot implement new trade deals.
Speaking in Brussels, Mr Barnier insisted the UK could not pick and choose the rules it will follow.
"During transition the UK will continue to take part in the single market, to take part in the customs union," he said.
"It will continue to have all the economic benefits, therefore it must also apply all the EU rules. The single market cannot be a la carte."
Downing Street said the new guidelines were "well aligned" with the UK position set out by Mrs May in her speech in Florence last year, though her official spokesman added: "There will naturally be some distance in the detail of our starting positions."
The UK's Brexit Secretary David Davis predicted bust-ups over several aspects of the EU's stance.
"There will be an argument about the right to negotiate free trade agreements," he told the House of Lords EU Committee.
"There will be an argument, I'm sure, about the issue of whether or not we can object to new laws that we haven't had a say in.
"There will be discussions about issues like representation on technical committee."
Mr Davis also suggested that final agreement on the withdrawal deal may continue as late as the end of 2018 in order to allow more time to "iron out" details of the future UK/EU trade relationship.
But Mr Barnier gave short shrift to the idea, saying the October deadline for the deal could not change by more than a week or so because time had to be allowed for ratification.
In the House of Commons, Tory eurosceptic Bill Cash urged the British Government to reject any agreement which requires the UK to remain a part of EU frameworks after the date of Brexit.
"Given that we're leaving the EU and therefore the customs union, the single market and the provisions relating to freedom of movement, is the Government going to reject this new EU ultimatum - including that the EU court of justice will continue to apply to the UK?" he asked.
And former minister John Redwood said Britain must be prepared to walk away without a deal.
"Many of us want new borders, fishing and agriculture policies and the reduction of taxes the EU insists on where we do not agree," said Mr Redwood.
"To get on with improving these we do not want a two-year so-called transitional period if that means we can't take control of our laws, borders and money."
As Mrs May met her Brexit "inner circle" for a meeting in Downing Street, the chairman of the Commons Exiting the EU Committee, Hilary Benn, was scathing about ministers' failure to provide a clear vision of the post-withdrawal end-state which they are seeking.
"We are now 19 months on from the referendum and neither Parliament nor the rest of EU are any the wiser about what the Government actually wants from the Brexit negotiations," said Mr Benn. "Extraordinary and unacceptable."
Downing Street declined to comment on reports that German Chancellor Angela Merkel had told reporters in a private meeting that whenever she asks Mrs May what she is seeking, the British Prime Minister responds: "Make me an offer."
Brexit legislation will go before Britain's House of Lords on Tuesday where it is set for a rocky ride.
Vince Cable said he believes the Liberal Democrats can win enough support to get at least 10 amendments through, including junking the exit day from the legislation through an "unholy alliance".