Updated: 15.45

Irish opposition parties are welcoming what has been described as a dramatic policy shift by the British Labour Party on Brexit.

The party is pledging to continue Britain's membership of the European Union single market and the customs union during a transitional period following Britain's EU exit in March 2019.

The party's shadow Brexit secretary, Keir Starmer, has also not ruled out negotiating the possibility of a new single market and customs arrangement on a permanent basis.

Effectively, a British Labour government would try to keep Britain inside an economic union while leaving the political union with the European Union.

At the British general election, Labour promised to seek to "retain the benefits" of the single market and customs union as part of a "jobs-first" Brexit.

But party leader Jeremy Corbyn has so far stopped short of committing to continued membership beyond the date of Brexit.

However, writing in The Observer, Mr Starmer said a British Labour government would abide by "the same basic terms" of Britain's current EU membership during the transition - which could last as long as four or five years.

Mr Starmer wrote: "Labour would seek a transitional deal that maintains the same basic terms that we currently enjoy with the EU.

"That means we would seek to remain in a customs union with the EU and within the single market during this period. It means we would abide by the common rules of both."

The clarification of position by the opposition piles pressure on British Prime Minister Theresa May and Brexit Secretary David Davis, ahead of the resumption of talks in Brussels on Monday.

Irish reaction

On the decision, Fianna Fáil leader Micheál Martin said: "The decision taken by the Labour Party is a positive development.

"It is a sensible decision and one which my colleagues and I welcome.

"There is now an onus on all government's across Europe to prevent a hard Brexit from occurring and to look at all options that would ensure Britain's continued membership of the customs union during an extended transitional period.

"Keeping Britain in the single market and customs union is essential for Ireland

"The Government must do everything it can to help make this a reality.

"A hard Brexit would be disastrous for Ireland and would cause serious damage to our strong relationship with Britain."

Labour Party leader Brendan Howlin has also welcomed the policy shift.

Deputy Howlin said: "This is a welcome development today by the British Labour Party and their Brexit spokesperson Sir Keir Starmer.

"The acknowledgement of the need for an extensive transition period of up to four years where the UK would stay in the single market and customs union is welcome.

"It will provide an important stimulus to the ongoing debate in the UK on what their future relationship with the EU will be. I hope the UK government will respond favourably to this development.

"However, the UK will need to go much further than this if we are to avoid a hard border on our island, and huge disruption to trade and economic relationships between our islands."

Pressure could be ramped up on UK PM Theresa May | File photo

The clarification of position by the opposition piles pressure on British Prime Minister Theresa May and Brexit Secretary David Davis, ahead of the resumption of talks in Brussels on Monday.

With a number of UK Conservative MPs agreeing with Labour's position, it is now unlikely the British government has a House of Commons majority to leave the single market during any transition period.

Staying in the single market beyond March 2019 would mean the UK continues to abide by EU rules on free movement, accepts the jurisdiction of the European Court of Justice (ECJ) in trade issues, and pays money to Brussels.

British Labour's move came as David Davis lashed out at Brussels and demanded the European Commission be more "flexible" in negotiations on the UK's withdrawal from the EU.

He is pushing for EU negotiator Michel Barnier to be less rigid in his refusal to discuss the post-Brexit relationship between the UK and Europe.

Mr Barnier insists progress must be made on key aspects of the withdrawal deal - including the UK's "divorce bill", citizens' rights and the Irish border - before there is any talk of future arrangements for crucial issues such as trade.