A trade deal between the UK and European Union is unlikely to be negotiated within two years, alongside Brexit negotiations, a German official has said, while sounding cautiously optimistic over the issue of citizens’ rights.

Related: ‘Lonely Theresa May’ video at EU summit is Brexit in a nutshell

Stephan Mayer, the home affairs spokesman for Angela Merkel’s party, said it would be ambitious to think a trade deal could be concluded within a two-year period.

However, he suggested the issue of citizens’ rights could be easier to resolve. His comments come after Theresa May told EU leaders she wanted an early agreement on the status of Britons living on the continent and EU citizens resident in the UK.

Mayer told BBC Radio 4’s Today programme: “I have much sympathy and understanding for this British position.

“Certainly more than 1 million British citizens live in the other 27 member states, so that is a very decisive issue for the UK government and certainly the other way around; more than 300,000 German citizens, for instance, are living in the UK, so I think we have the same interests.”

The German politician said it was “a little bit naive” to think a trade deal could be achieved in two years.

“There is a clear German position – we want negotiations on a level playing field and certainly we would like Great Britain to stay as a very important pillar within the single market and contribute to the single market.”

He added: “I think it is very ambitious to finish these negotiations within two years.”

The push for an early agreement on the status of citizens comes amid concern from many European leaders about the rights of their nationals in a post-Brexit Britain.

The Irish taoiseach, Enda Kenny, revealed May’s comments after the European Council meeting in Brussels, telling reporters that the prime minister updated her fellow leaders about the supreme court case on article 50 and her hope for a deal on EU nationals.

“She would like to have the question of UK citizens living in Europe and European citizens living in the UK dealt with in the early part of discussions that take place,” he said.

May left the summit in Brussels without answering any questions on the UK’s break from the EU. The other 27 leaders continued their discussions without May to finalise their approach to the negotiations.

However, the Brexit discussion, set to be held over a three-course dinner, ended up lasting just 20 minutes as talks about other pressing issues, including the refugee crisis and ceasefire violations in eastern Ukraine, continued late into the night and led to the dinner being cancelled.

Downing Street insisted the Brexit process could be completed within two years after the UK’s ambassador to the EU privately said it could take up to a decade to finalise, and even then could fail to be ratified by member states.

No 10 said Sir Ivan Rogers was passing on the views of other EU nations.

The chancellor, Philip Hammond, rejected the suggestion that a trade deal could take a decade to reach.

Speaking on a visit to South Korea, he told the BBC: “I don’t expect that it will take as long as that. There will be two stages in this process: first we will negotiate a deal for our exit from the European Union and, once we have started that process, we will, in parallel, begin to negotiate new arrangements with our former European Union partners so that we can continue to trade and work closely with them.”

The prime minister ducked questions about the potential bill the UK will be landed with as part of the divorce settlement with Brussels.

The Czech Republic’s Europe minister, Tomas Prouza, said the issue would be one of the main items on the table in negotiations. Reports have suggested the final cost could be as high as €60bn (£50bn), including payments to cover pension liabilities for EU staff.

This article was written by Jamie Grierson, for theguardian.com on Friday 16th December 2016 09.10 Europe/London

guardian.co.uk © Guardian News and Media Limited 2010