The European Union has expressed "surprise" at a complaint by Britain’s Brexit Secretary David Davis about the EU planning for a "no deal" Brexit given the scenario was first put forward by the British Prime Minister.
In a letter to Theresa May, Mr Davis said he would urge the EU to drop measures and guidance that could require UK companies to relocate to Europe or risk contracts being terminated in the event of no deal.
In response, European Commission chief spokesman Margaritis Schinas said: "We are somehow surprised that the United Kingdom is surprised that we are preparing for a scenario announced by the UK government itself.
"After all, it was prime minister May herself who said in her Lancaster House speech in January 2017, and repeated in her Florence speech in September, that 'no deal for Britain is better than a bad deal for Britain, it is right that the government should prepare for every eventuality'.
"So we take these words by the prime minister very seriously and it is therefore only natural that in this house we also prepare for every eventuality."
In the letter, obtained by the Financial Times, Mr Davis warns Mrs May that EU agencies have issued guidance to businesses stating that the UK will become a "third country" after Brexit in March 2019, with no reference to a future trade deal sought by both sides.
He said he would urge the European Commission's Brexit task force to withdraw the statements made so far, in light of the agreement reached in December to begin trade negotiations.
But Mr Schinas said the EU "don't feel there is anything new for us to say" about a transition period or trade deal, "since this is part of the next stage of the negotiation".
Mr Davis described the EU's moves as "potential breaches of the UK's rights as a member state" and insisted "we cannot let these actions go unchallenged".
But asked if the EU's work breached Britain's rights, Mr Schinas replied: "No."