By Alastair Macdonald
BRUSSELS (Reuters) - European Union leaders will tell Britain next week it must improve the terms of its withdrawal offer, but give London the prospect of a rapid move to free-trade talks in December if that happens, their draft joint statement showed.
The remaining 27 EU leaders will discuss Brexit without British Prime Minister Theresa May next week after a fifth round of technical negotiations ended in a deadlock earlier on Thursday.
While the draft statement makes clear that no "sufficient progress" in divorce talks was made on safeguarding citizens' rights, the Irish border and Britain's exit bill, it also has the 27 states making a substantial gesture towards London.
The draft, submitted to the 27 governments on Thursday, said the EU should launch immediate internal work on possible transitional arrangements after Brexit so that it can move to talks on future ties with Britain as soon as possible after "sufficient progress" is made on the three basic matters.
"At its next session in December, the European Council will reassess the state of progress in the negotiations with a view to determining whether sufficient progress has been achieved," said the draft, seen by Reuters.
Should that happen, it said the EU 27 would prepare the necessary official documents on "the framework for the future relationship and on possible transitional arrangements which are in the interest of the Union."
"In order to be fully ready for such a scenario," it said, EU leaders task their Brexit negotiator Michel Barnier "to start internal preparatory discussions."
(Reporting by Alastair Macdonald, Writing by Gabriela Baczynska; Editing by Hugh Lawson)