Negotiators have told their counterparts in Brussels that its hardline position will harm around 7,000 Europe-based investment funds that rely on British clients for business, the Guardian reports.
A section of a UK presentation made to the European commission’s negotiators last week, and seen by the paper, warns that obstacles to European financial interests operating in the UK could be put in place if the status quo is not maintained, at least initially.
The hardball tactic comes after Michel Barnier, the EU's chief negotiator, apparently ruled out the UK's latest proposal for how financial services should operate across the border after Brexit.
The expanded equivalence model, which was viewed as a climbdown by many in the City, was reportedlyrejected by Barnier during his meeting with EU27 ministers, with the Eurocrat reportedly saying it would impede on Brussels' powers to unilaterally withdraw market access.
But the UK has repeatedly rubbished the EU's proposed version of equivalence as not being sufficient to deal with the complexity and size of the interrelated system.