Leaders of the EU27 are considering a deal in which the UK could remain in the Single Market for goods without having to compromise on freedom of movement.
The Times reports that member states are willing to abandon one of the four freedoms – said to be indivisible – if Theres May accepts more concessions on the UK side. They are expected to include adopting all the EU's new environmental, social and customs rules.
The potential trade-off marks the first major chink in the unified position and goes against what chief negotiator Michel Barnier recently laid out. He recently said such a proposal, which was put forward in the Chequers deal, could not be accepted because it would "undermine our Single Market, which is one of the EU's biggest achievements".
But British negotiators have stressed that an existing model, between the EU and Channel Island Crown dependencies including Jersey, already exists, albeit at a smaller scale.
The governments Brexit white paper, which is based on the Chequers deal, calls for the two sides to develop a “common rule book” allowing Single Market access on goods with regulatory alignment on state aid and competition, while allowing room to diverge on environmental and social legislation.
The so-called Jersey option is due to be discussed at a special meeting of all the leaders, including May, at next month's Salzburg summit.
May's facilitated customs arrangement, which was the cause of much criticism and triggered the resignations of former Brexit secretary David Davis among others, is likely to be tossed out, however.