Brexit Secretary Stephen Barclay’s Brussels talks have been hailed by the Government as “productive” after European Commission president Jean-Claude Juncker delivered a pessimistic take on the EU withdrawal situation.

Mr Barclay and Attorney General Geoffrey Cox will again meet EU chief Brexit negotiator Michel Barnier next week to continue discussions on the contentious Northern Ireland backstop.

The move follows comments by Mr Juncker that he is “not very optimistic” that a no-deal Brexit can be avoided.

Mr Juncker said UK withdrawal from the EU without a deal would have “terrible economic and social consequences”.

However, Mr Barclay struck a more upbeat note as the UK continued to seek guarantees that the backstop arrangements will be temporary.

A Brexit department spokesman said the Brussels meeting had been “productive”, adding: “They discussed the positions of both sides and agreed to focus on what we can do to conclude a successful deal as soon as possible.

“It was agreed that talks should now continue urgently at a technical level.

“The Secretary of State and the Attorney General will discuss again with Michel Barnier early next week.

HammondChancellor Philip Hammond said he would keep working to prevent a no-deal Brexit as long as he felt he could influence the outcome (Stefan Rousseau/PA)

“The Attorney General will also explore legal options with the commission’s team.”

Meanwhile, Chancellor Philip Hammond described Brexit as “a large black cloud” hanging over the UK economy and said a no-deal departure would be “extremely bad” for Britain.

In an interview with BBC One’s Breakfast a day after three Tory MPs resigned from the party over Brexit, the Chancellor was repeatedly asked whether he would quit the Cabinet if Mrs May went for no-deal.

He replied: “I will always do what I believe is in the best interests of the country.”

Asked if a no-deal Brexit would be in the UK’s best interests, Mr Hammond said: “No, definitely not.”

Speaking to the European Economic and Social Committee in Brussels on Thursday, following a meeting with Theresa May the previous evening, Mr Juncker said he was “recovering” from his talks with the Prime Minister and had “Brexit fatigue”.

“Brexit is deconstruction, it is not construction. Brexit is the past, it is not the future,” he said.

“If a no-deal would happen – and I can’t exclude this – this would have terrible economic and social consequences, both in Britain and on the continent, and so my efforts orient in a way that the worst can be avoided.

“But I am not very optimistic when it comes to this issue.”

Labour leader Jeremy Corbyn also met Mr Barnier in Brussels, stating after the talks that there was real concern on the EU side about the prospects of a no-deal break.

Jeremy CorbynJeremy Corbyn outside EU headquarters in Brussels (Virginia Mayo/AP)

“The threat of no deal is something that has deeply exercised people throughout the European Union. They are very worried about the consequences of it,” he told reporters.

“That was conveyed to us in no uncertain terms during the meetings. That is why we are determined to get no deal off the table.”

Mrs May is eager to get movement on the backstop before the Brexit issue returns to the Commons for a series of votes on February 27, when MPs are expected to mount a bid to delay Brexit beyond March 29.

Countdown to leaving the EU(PA Graphics)

Mr Hammond said the PM’s ability to put her deal to another “meaningful vote” ahead of the next Commons showdown will “depend on (the) progress that is made over the next few days”.

The backstop arrangements would see the whole of the UK remain in a customs union with the EU and Northern Ireland following some single market rules until a wider trade deal is agreed, in order to prevent the need for checkpoints on the Irish border.

Mrs May will be attending a two-day EU-League of Arab States summit in the Egyptian Red Sea resort of Sharm el Sheikh starting on Sunday.