Brussels and the UK have "fundamental" disagreements over citizens’ rights and there must be "clarification" on Britain’s position on a number of issues, the EU’s chief Brexit negotiator said.
After four days of negotiations, Michel Barnier said there had been some areas of agreement about how Britons living abroad and EU nationals living in the UK should be treated after Brexit.
But he said Brussels believed citizens’ rights should be backed by the Court of Justice of the European Union.
And he warned Britain all accounts "must be settled" when it quits the bloc.
He said: "There does remain one fundamental divergence on the way in which such rights would be guaranteed and on several other points, for example, the rights of future family members or the exports of certain social benefits."
Brexit Secretary David Davis said talks had been "robust" but there was a lot to be "positive" about.
"I'm encouraged by the progress we've made" says #Brexit secretary David Davis after 2nd round of talks to leave EU https://t.co/UswBViTNRX pic.twitter.com/KIYb4ovWDK— BBC News (UK) (@BBCNews) July 20, 2017
Further details about the UK’s willingness to pay a fee to Brussels will be required before talks can move on to a future trade deal, Mr Barnier indicated.
But the UK is understood to think the EU team are being unclear on what they believe the legal obligations are over the divorce bill as well, with frustration on both sides.
Mr Barnier said: "A clarification of the UK position is indispensable for us to negotiate and for us to make sufficient progress on this financial dossier, which is inseparable from the other withdrawal dossiers.
"What we want - and we are working on this - is an orderly withdrawal for the United Kingdom, that’s decided. An orderly withdrawal means accounts must be settled.
"We know that agreement will not be achieved through incremental steps. As soon as the UK is ready to clarify the nature of its commitments, we will be prepared to discuss this with the British negotiators."
- Press Association