Theresa May is set to propose a transitional deal with the EU of up to two years.The PM is also expected to make an “open and generous” offer, potentially worth 20bn euros over the two years.

It would mean the EU does not have to unpick its current budget – so no other EU member loses out from Brexit. No 10 hopes the speech, which has been agreed by the cabinet but could yet be revised, will speed up Brexit talks.

Mrs. May briefed her top team at a marathon two and a half hour cabinet meeting in Downing Street on what she will say in Florence.

A government source said that the intention was to make the potential payments conditional on continued access to the single market and some form of customs union which allowed the UK to strike its own trade deals during the transition period.

Mrs. May is not expected to say how much the cash offer will be worth, the exact nature of the arrangements for accessing the single market or any conditions attached to the money in her much-anticipated speech – these are subject to the negotiations in Brussels.

Additional long term liabilities, like EU pensions and debts, will also have to be dealt with in the talks to come, so the eventual Brexit bill is likely to be far higher than that 20bn euros (about £18bn) or so.

Mrs. May is also expected to repeat her assertion that the UK will seek its own bespoke trade deal after Brexit with the rest of the EU.

She is therefore likely to rule out seeking an equivalent to the Canada-style free trade deal, preferred by some Brexiteers, and an arrangement like the European Economic Area, where countries retain a full relationship with the single market but have to accept elements of the freedom of movement.

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