The EU is reportedly demanding guarantees the UK will compensate the bloc if a future government reneges on the Brexit “reset” agreement Keir Starmer is currently negotiating.

The termination clause is a stark reminder of the painful and costly divorce in which the EU set up a colossal €5.4bn (£4.7bn) fund to help its member states cope with the disruption caused by the UK’s exit in 2020.

According to the Financial Times, a draft text of an agreement on agriculture trade, aimed at removing post-Brexit checks on farm produce, calls for any party pulling out of the agreement to cover the cost of reinstating border and infrastructure controls in the future.

Nicknamed the “Farage clause” by EU diplomats, it is seen in some quarters as a means of ensuring the bloc is not left out of pocket should the Reform leader win a general election and make real his threat to cancel any UK-EU sanitary and phytosanitary (SPS) agreement.

However, UK sources dismissed this notion, saying such a clause was routine in international deals and was written “to work both ways”, and would therefore also force the EU to compensate the UK if it backed out of the deal in future.