By Michael Holden and Andy Bruce
LONDON (Reuters) - Britain headed into a fresh round of Brexit trade talks on Tuesday acknowledging it could break international law but only in "a limited way" after reports it may undercut its divorce treaty with the European Union.
As the pound fell on fears of a no-deal exit, the government's legal department head quit because he felt a plan to overwrite parts of the Withdrawal Agreement treaty signed in January was wrong.
Britain left the EU on Jan. 31 but talks on new trade terms have made little headway as the clock ticks down to an October deadline and then the end of the status-quo transition arrangement in late December.
As diplomats gauged whether Johnson was blustering or serious about allowing a tumultuous finale to the four-year saga, Britain insisted it would abide by the treaty.
Asked if anything in the proposed legislation potentially breached international legal obligations or arrangements, Northern Ireland minister Brandon Lewis said: "Yes, this does break international law in a very specific and limited way."
"We are taking the powers to disapply the EU law concept of direct effect required by article 4 in a certain, very tightly defined circumstance," he told parliament.
He added that the government supported the Northern Ireland protocol of the Withdrawal Agreement.
Amid warnings from the EU that if it reneged on the divorce deal there would be no trade agreement, former Prime Minister Theresa May told the government that it risked serious damage to its international image.
"The government is now changing the operation of that agreement," May, who resigned after her Brexit deal was repeatedly rejected, told parliament.
"Given that, how can the government reassure future international partners that the UK can be trusted to abide by the legal obligations of the agreements it signs?" May asked.
The Financial Times said the government's "very unhappy" legal head Jonathan Jones walked out in protest over the possible plan to undercut the withdrawal agreement in relation to the protocol for British-ruled Northern Ireland.
(Writing by Guy Faulconbridge in London; Additional reporting by Elizabeth Piper in London, John Chalmers and Gabriela Baczynska in Brussels, Padraic Halpin in Dublin, Michael Nienaber and Christian Kraemer in Berlin; Editing by William Schomberg and Andrew Cawthorne)