EU and UK agree draft Brexit political declaration, as May speaks to Sanchez over Gib row
Theresa May's plan for Brexit has cleared another hurdle, after negotiators in Brussels agreed a text for the proposed political declaration on future EU/UK relations.
European Council president Donald Tusk announced that the text had been agreed in draft form by EU and UK negotiators and "agreed in principle at political level".
A leaked copy of the draft text makes no mention of Gibraltar.
The announcement came as Spain continued to push back over the status of Gibraltar in the divorce deal.
Spanish Prime Minister Pedro Sanchez has said his government is "annoyed" that the agreement does not specify that Gibraltar's inclusion in any future arrangements between the UK and the EU must be decided directly by officials in Madrid and London.
He insists that the issue is a bilateral matter and has threatened that Spain could vote against the withdrawal agreement unless its interests are taken into account.
Mrs May, who has made clear that Gibraltar will not be excluded from the UK's negotiations for a future relationship wit the EU after Brexit, spoke with Mr Sanchez by phone on Wednesday evening to try to deal with the situation.
A Downing Street spokesman said: "She said there had been good engagement between the UK, the government of Spain and the government of Gibraltar in order to come to an agreement in the withdrawal agreement and associated package of memoranda of understanding relating to Gibraltar."
"She said that the UK and government of Gibraltar looked forward to these discussions continuing as we discuss the future relationship."
"The Prime Minister reiterated her commitment to agreeing a deal that works for the whole UK family including Gibraltar, the other UK overseas territories and the crown dependencies."
Agreement of the draft political declaration clears the way for a special Brexit summit to go ahead in Brussels on Sunday, when leaders of the 27 remaining EU states are expected to give their stamp of approval to the declaration alongside the 585-page withdrawal agreement setting out the terms of the UK's departure.
It follows a meeting in Brussels on Wednesday evening between the Prime Minister and European Commission president Jean-Claude Juncker, and is the first indication that the pair reached political agreement in principle on the text.
Downing Street has repeatedly made clear that agreement is needed on the future framework - setting out aspirations in areas like trade and security co-operation and believed to run to a few dozen pages - in order to press ahead with the legally-binding withdrawal agreement.
In a tweet, Mr Tusk said: "I have just sent to EU27 a draft Political Declaration on the Future Relationship between EU and UK.
"The Commission President has informed me that it has been agreed at negotiators' level and agreed in principle at political level, subject to the endorsement of the Leaders."
Mrs May is to make a statement to the House of Commons on Thursday afternoon on the latest developments and was speaking to members of the Cabinet in a conference call ahead of that.
There was speculation that the Prime Minister was struggling to keep her Brexit deal alive, after she announced following her meeting with Mr Juncker that she would return to Brussels on Saturday for further talks.
Mrs May said after the meeting that she and the Commission president had given "sufficient direction" to negotiators for work to begin "immediately" on resolving remaining issues.
It is believed that negotiators worked through the night to produce Thursday morning's breakthrough.
The new text was dismissed by Scottish First Minister Nicola Sturgeon as "lots of unicorns taking the place of facts about the future relationship".
"Fair play to the EU for pushing it as far as possible, but it adds up to a blindfold Brexit," said Ms Sturgeon.
"Difficult issues unresolved - so extended transition/backstop almost certain."
It remains unclear whether further negotiation will be needed on Sunday to resolve tensions over elements of the separate withdrawal agreement, or whether the summit will be a simple rubber-stamping exercise
As the countdown to the scheduled summit intensified, Chancellor Philip Hammond said that if the Brexit deal is rejected by Parliament it would unleash "political chaos" and could lead to EU withdrawal not happening.
He told ITV's Peston: "It's clear that if the deal is not approved by Parliament we will have a politically chaotic situation.
"And we don't know what the outcome of that will be.
"And for those who are passionately committed to ensuring that we leave the EU on the 29th of March, 2019, one of the things that they are going to have to bear in mind is the possibility that, in that chaos that would ensue, there may be no Brexit."
Germany's economy minister Peter Altmaier told BBC2's Newsnight: "There is a lot at stake.
"And therefore if it is possible to agree on Sunday we should do it.
"I know there are a lot of divergent interests still, but I believe these problems can be overcome."
Meanwhile, it was reported that Foreign Secretary Jeremy Hunt had warned the PM that her Brexit proposals risked taking the UK into a "Turkey trap".
The Daily Telegraph said Mr Hunt told Mrs May the UK faced a situation similar to Turkey which has been negotiating its status with the EU for decades.