Britain's International Trade Secretary Liam Fox has accused Brussels of trying to "blackmail" the UK into agreeing a Brexit divorce bill.

On a business delegation to Japan, he expressed frustration at the European Union's insistence on agreeing a settlement before moving on to trade talks.

He said: "I think there is frustration that we have not been able to get on that longer-term issue, that we're stuck on this separation issue and we're not able to get onto the issues that will matter in the longer term for the future prosperity of the UK and the people of Europe."

Mr Fox says businesses from across Europe want "more pressure" put on the EU Commission to open up talks about the future relationship without insisting that UK payments are agreed upon first.

Speaking to ITN News he added: "We can't be blackmailed into paying a price on the first part.

"We think we should begin discussions on the final settlement because that's good for business."

Yesterday, EU negotiator Michel Barnier accused his British counterparts of being "nostalgic and unrealistic" as talks reached deadlock.

Mr Barnier said the two sides are still "quite far" away from being in a position to begin talks on future trade arrangements - which the UK is hoping to begin next month.

He said there had been some fruitful discussions - including over Ireland and the status of border workers - but also struck a critical tone.

"This week provided useful clarifications... but we did not get any decisive progress on the central subjects," the EU negotiator said.