Guy Verhofstadt, the parliament’s Brexit coordinator, said it needed to begin scrutinising any agreement at least three months before exit day – which is 29 March next year.
Asked to give the deadline for a deal, he replied: “Before the end of the year. That is the ultimate date, otherwise we cannot be assured to have a vote in plenary in March.”
Mr Verhofstadt said he remained optimistic of a deal in the autumn – despite the UK and EU remaining far apart on key issues – but warned: “You cannot go beyond 2018.”
The comment came as the former Belgian prime minister dismissed both of the solutions put forward by Theresa May to solve the impasse over customs and the Irish border.
On the prime minister’s preferred “customs partnership” – under which the UK would collect EU duties – he said: “No, we cannot outsource our competences on customs duties. That will not happen.”
And he warned the rival, technology-based “max fac” idea could bring the return of violence to Ireland, by requiring cameras and a border, calling it “a dangerous step to do”.
Mr Verhofstadt refused to speculate on whether a failure to agree a deal by December’s EU summit would trigger a request to extend the Article 50 deadline of March next year.
It was “not a good moment” to speculate because that would “take pressure away from those who have to deliver in October or November”.
Giving evidence to the Commons Brexit Committee, the EU parliament’s negotiator also:
* Branded the UK’s plan for a one-year customs “backstop” to solve the Irish border issue “not acceptable” – because it could not be time limited.
* Dismissed David Davis’s claim that the thrust of a future trade deal could be agreed by next March – insisting it would take “the whole transition period”, until the end of 2020.
* Insisted it was “impossible” for the UK to stay within the European arrest warrant – arguing the best hope was an extradition agreement that retained its benefits as “far as possible”.
* Expressed hope of a last-gasp UK change of mind to stay in the customs union and single market, saying: “I think there is no opposition from the European side if that proposal comes to Brussels.”
* Said Brexit had “opened our eyes in the European Union” about the need for reform – but denied that necessarily meant more integration, which the UK would have opposed.
* Argued the UK should pursue an “association agreement”, along the lines of Ukraine, which does not require ratification by all EU nations but “can take some time”.
Mr Verhofstadt also said the UK was not using its “room of manoeuvre”, even as an EU member, to tighten rules on immigration – believed to be a key cause of the Brexit vote.