After war cabinet, Britain's Theresa May to set out 'way forward' on Brexit

British Prime Minister Theresa May will set out "the way forward" for Brexit next week after a meeting with top aides on Thursday intended to resolve differences over strategy that are dividing her team, and frustrating European Union negotiators.

Offering little insight into how or whether the rifts that have hobbled talks to unravel more than 40 years of union had been healed, her office said her team had spoken for eight hours on subjects ranging from the car sector to digital trade.

But one source close to the meeting at Chequers said May had accepted the argument of those ministers who wanted to move away from EU rules and regulations more quickly than others.

"Divergence has won," the source told Reuters on condition of anonymity.

May's meeting with her so-called Brexit war committee at her 16th-century country residence was called to try to reach agreement on a preferred vision for Britain outside the EU, opening the way for May to make the final speech in what the government has called the "Road to Brexit" series of addresses.

Twenty months after Britons voted to leave the bloc in a referendum, May's government has yet to put flesh on the bones of her vision for future ties - plans which were dealt a blow earlier on Thursday when EU sources ruled out her proposal for "managed divergence" from the bloc's rules as "cherry picking".

Britain's prime minister is also feeling the heat from Brexit hardliners in her party who have called her acceptance of a status-quo transition after Britain leaves in March 2019 everything from a "betrayal" to "a perversion of democracy".

After a dinner of cream of sweetcorn soup and slow braised Guinness short rib of beef, her office said: "The way forward will be set out by the PM in a speech next week following discussions at full cabinet."

Her aides had suggested the meeting would not produce the fireworks some commentators expected. But some lawmakers had doubted agreement was likely between those who want to maintain close ties with the EU, and others who are pressing for Britain to strike out alone and diverge from the bloc's rules.

"CLEAR DIRECTION"

"This is the most important decision any cabinet has made for many years. It has to be got right," Conservative lawmaker David Jones, a former junior Brexit minister, told Reuters.

"The party and the country are looking for clear direction, and formulation of the British position must take as long as it requires," he said, adding it would have to be clear in time for an EU summit beginning on March 22.

May's cabinet of top ministers is not alone in being deeply divided over life after Brexit. The rifts are mirrored across Britain where the debate over plans to leave the EU after the June 23, 2016, vote has become increasingly angry and divisive.

Several groups, and even a new party, are being formed to represent all sides of the debate, ranging from pressing for a Brexit reversal or a second referendum, to those accepting Brexit but differing over whether Britain should be in or out of the bloc's existing trading arrangements.

A draft document published by the government on Wednesday incensed some hardline Brexit campaigners.

Conservative lawmaker Jacob Rees-Mogg wrote in the Telegraph newspaper that to avoid the "perversion of democracy" that he believed it suggested, Britain must be able to sign trade deals during the transition.

May's spokesman said it had long been government policy that Britain would be able to agree and sign such deals during the time-limited period.

The EU is also taking a tougher stance. On Thursday, sources in Brussels rejected a proposal made by May in a speech in Florence last year for "managed divergence" from EU rules.

May's spokesman was unruffled. "We're in a negotiation," he said. "We've set out our position, the Commission will set out theirs. It's a negotiation."