On the issue of trading in services, which account for almost 80pc of the UK's economic activity, the report said: "A free trade agreement would still be needed to cover arrangements relating to services, as well as areas in which the European Union has made clear it wants a continued level playing field, in order to maintain any reciprocal preferential market access".
British foreign minister Boris Johnson said on Monday that London was concerned at Iran's role after anti-aircraft fire on Saturday downed an Israeli warplane returning from a bombing raid on Iran-backed positions.
One said: "They are going down the route of mutual recognition". His allies cautioned, however, that a final decision on a preferred model had not yet been taken.
Earlier, the EU's chief negotiator for Brexit Michel Barnier commented that the agreement on the transitional period "is not a given" because there are "substantial" disagreements between the parties on a number of issues, such as freedom of movement and border control of the North Ireland and the Republic of Ireland.
Head of The City UK lobbying group Miles Celic said that the plan, if realised, would closely match the body's wish list.
The proposal was developed by the International Regulatory Strategy Group, an industry body that consulted widely across the European Union, as an alternative to the EU's "equivalence" regime that applies to third countries.
A man takes a photograph of the Canary Wharf financial district from Greenwich Park in London Thomson Reuters LONDON (Reuters) - Britain's government is ready to push for a mutual recognition system to regulate financial services after it leaves the European Union in order to preserve the City of London's access to the bloc, the Financial Times reported on Friday.
An American Man Actually Won A Luge Medal At The Olympics
American Chris Mazdzer is in fourth place, just a thousandth of a second out of third place. Mazdzer finished 13th in two previous Winter Games , so this was quite a step up.
German Chancellor, Angela Merkel has said she is looking forward to learning Britain's actual plans for Brexit as a new round of talks start next week.
"Instead of putting on the table concrete goals for the future relationship to the continent, the British government is delaying the process with unclear language", said BDI director general Joachim Lang.
"I will reiterate that the United Kingdom remains unconditionally committed to European security and set up my vision for a unique partnership between the EU and the United Kingdom on defence, information sharing, security and law enforcement", she said.
Neither "rigid institutional restrictions" nor a "deep-seated ideology" should come before protecting the public, she will say, insisting that Britain and Europe's common enemies "would like nothing more than to see us fractured".
These now come under the jurisdiction of the European Court of Justice and there are fears that Brussels could undermine a deal by making unreasonable demands about the role of the court.
Barnier told an event in Munich on Friday the two sides are heading for an orderly Brexit, rather than a "no deal" sought by some anti-EU hardliners in Britain.
May is hoping to negotiate a transition deal next month which would leave Britain's relationship with the European Union virtually unchanged for around two years.