By Jan Strupczewski and Gabriela Baczynska
BRUSSELS (Reuters) - Talks between Britain and the European Union on their future relationship are now less likely to start in October, the EU's top negotiator has said, due to a lack of progress on Brexit divorce issues so far, EU officials said.
The EU's top Brexit negotiator Michel Barnier on Wednesday briefed ambassadors from the 27 countries that will remain in the EU after Britain leaves in March 2019 on the outcome of the July round of the monthly divorce talks with London last week.
"He said the likelihood of starting the future relationship talks in October appeared to be decreasing," one EU official involved in the Brexit talks said.
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Britain's Brexit government department responded by saying it was confident it would make enough progress by October to move on to talks about the future relationship with the bloc.
"We have already made good progress on a number of issues, ... government officials are working at pace, and we are confident we will have made sufficient progress by October to advance the talks to the next phase," a spokesman for the department said.
Barnier had earlier hoped that sufficient progress on the key divorce issues -- a financial settlement, citizens rights and a solution for a non-physical border between Northern Ireland and Ireland -- could be made by October.
This would allow EU leaders to give their consent to starting talks with London on the main aspects of the relationship after Brexit -- a discussion Britain is keen to start as soon as possible to provide more clarity to businesses.
But with no progress on the financial settlement except Britain's general admission that it would owe the EU an unspecified amount, and little to no real progress on other issues, the odds of a future trade relationship discussion starting in two months are declining.
"On the financial settlement, we have been clear that we recognize the UK has obligations to the EU and that the EU also has obligations to the UK," the Brexit department spokesman said.
EU officials said progress was difficult not because Britain had unacceptable demands, but because it had no position at all on many issues.
"Barnier expressed concerns that sufficient progress in October looked difficult now. Mainly because Britain has no position on finances, but also because they don't have positions on other issues as well," a second EU official said.
"The more they drag on, the less time is left for (the) second phase and special relationship they want," the second official said.
The EU's rough estimate is that Britain may owe it around 60 billion euros after it leaves in various legal commitments London has made as a member of the bloc, but talks are to focus on the methodology of calculation rather than the sum itself.
"There has still been no kick-off on money, Britain still refuses to accept anything – either the methodology, or the sum. This blocs everything else, there won’t be any real progress over the next two months, clearly that won’t create grounds for opening phase two on trade," a third EU diplomat said.
"On citizens' acquired rights, it’s a mixed picture. We have a list of things we agree on, disagree on and are some way in between. But that at least allows us to negotiate," the third official added.
Diplomats said that on Ireland, talks have not moved beyond restating positions that have already been presented in public.
"They have actually not discussed the Irish border in any detail, there were no technical talks at all," a fourth official said.
The next round of talks is scheduled for late August.
(Additional reporting by Kylie MacLellan in London; Reporting by Jan Strupczewski and Gabriela Baczynska; Editing by Catherine Evans and Hugh Lawson)