Britain will honour all its financial obligations to the European Union as part of its divorce bill, but the payments will not be required any earlier than if Britain had remained an EU member, the EU's chief negotiator Michel Barnier said.

The European Commission declared earlier that sufficient progress in the divorce talks with Britain was reached to move on to discussions of a transition period and a future trade deal.

Mr Barnier repeated the words of British Prime Minister Theresa May that no EU country, including Britain would have to pay more or receive less as a result of Brexit.

"The UK will honour all the commitments entered into during its EU membership," he told a news conference.

Scotland's First Minister has said that if Britain is leaving the European Union then single market and customs union membership were "the only sensible option".

Nicola Sturgeon added that the negotiations would now move on to a new tougher level.

"Move to phase 2 of talks good - but devil is in the detail and things now get really tough. If Brexit is happening (wish it wasn't) staying in single market & customs union is only sensible option. And any special arrangements for NI must be available to other UK nations," she said on Twitter.

Britain's Brexit Secretary David Davis said on Twitter: "Today is a big step forward in delivering Brexit. Been a lot of work but glad the Commission have now recommended that sufficient progress has been reached.

"Citizens can now be confident about the rights they enjoy; we should now move forward to discuss our future relationship with the EU on issues like trade and security."

Michael Gove, a senior pro-Brexit member of Mrs May's cabinet, has given the deal agreed this morning his support.

Speaking to BBC radio, he said it is  a significant personal political achievement for the Prime Minister.

"Earlier this week, there were all sorts of doomsayers who thought there would be no prospect of an agreement. They've been proven wrong," he added.

Finance Minister Philip Hammond has said the deal is a boost to the British economy.

Mr Hammond urged both sides to now move on to a trade deal that supports jobs and prosperity.

Pro-Brexit campaigner and former UKIP leader Nigel Farage said Britain was ready to "move on to the next stage of humiliation".