Frustrated EU fears Britain is 'heading for the Brexit rocks'

In the appositely named Salle de Margaret Thatcher, Guy Verhofstadt, the colourful former Belgian prime minister who is coordinating MEPs' response to Brexit, discussed with colleagues from the pro-European political parties on the parliament's Brexit steering group how they should respond to the seeming stalemate in the Brexit negotiations. The latest draft of a parliamentary resolution was discussed, lamenting the failure of the talks to develop on the key opening issues – citizens' rights, the Irish border and the financial settlement.

The resolution is set to advise the member states' leaders, who will make the big decision at a summit in Brussels on 19-20 October, that the negotiations cannot move on to trade as things stand. "The talk at the meeting was mainly about when to hold a vote on it in the parliament," an EU official said. "They want to have it on 3 October – the day before Theresa May makes her speech to Tory conference. They want the Tory delegates to hear about it."

The public reprimand for the prime minister at a sensitive point in the political calendar isn't just about grandstanding from the MEPs. Her government's offers on citizens' rights and the Irish border, along with a lack of offer on the financial settlement, has genuinely concerned senior figures within the European commission leading the negotiations and among the member states.

On citizens' rights, the offer to give EU nationals the same rights as British citizens would leave them with fewer rights than today. The solutions proposed in Ireland, involving the suspension of the normal border checks one would expect for a country outside the EU's customs union and single market, have been rejected almost out of hand by the commission, as an affront to the legal order. And on the financial settlement – perhaps the biggest stumbling block – the EU's chief negotiator has questioned whether Brussels can really trust the British on anything, given Downing Street's reluctance to admit Britain has a legal duty to live up to the spending commitments already made by the EU.

Meanwhile, the British claim they can't make progress on the Irish border or divorce bill unless they know what their relationship with the EU will be after 29 March 2019, when the UK leaves the bloc. That newly minted argument has particularly riled the commission, given that it was thought the British had accepted the idea of sequenced talks, with the trading relationship to be discussed once "sufficient progress" had been made.