Britain could remain under European Court of Justice jurisdiction after the Brexit date of March 2019, but move to a new arbitration mechanism during the planned two-year transition, David Davis has suggested.
The Brexit Secretary risked angering Conservative supporters of a 'hard Brexit' in a speech in Berlin on Thursday.
He said the implementation period proposed by Theresa May would involve 'keeping both the rights of a European Union member and the obligations of one, such as the role of the European Court of Justice'.
But speaking to the BBC on Friday, he suggested the ECJ’s role could be phased out before the end of the transition in 2021.
“We’ll start under the regulations as they are now, and then ideally we’ll end up with a circumstance where we have another arbitration mechanism, a dispute resolution mechanism,” he said.
“That’s for negotiation.”
In his speech to German business leaders, he urged EU nations not to 'put politics above prosperity' in their negotiation of a future relationship with the UK.
Asked whether Berlin and Paris were combining to hold up a deal, Mr Davis said: “Oh no. To be clear, Germany and France … are the most powerful players on the European continent, of course they are.
“So what they believe is very influential, sometimes decisively so. But its a whole-of-Europe decision, a 27-country decision.”
Mr Davis indicated Britain is seeking compromise from the EU side to break the deadlock which has prevented discussion of anything but the 'divorce' issues of the UK’s exit bill, citizens’ rights and the Irish border.
“In any negotiation you want the other side to compromise,” he said.
“I want them to compromise. Surprise, surprise, nothing comes for nothing in this world.
“But so far in this negotiation, we’ve made quite a lot of compromises. On the citizens’ rights front, we’ve made all the running.”
He also indicated that compromise might be in the offing in Westminster with rebels who object to Government plans to enshrine the date of Brexit in law.
Mr Davis said putting the date in the EU Withdrawal Bill was a 'good idea', but added: “How it’s done and what the form of it is is being debated in the House. I’m not going to pre-empt that.
“The whole of this Bill is going to be debated through the House – the whole of it – and there are parts of it that will change as it goes through.”
A Downing Street spokesman said Mr Davis was simply reiterating Mrs May’s position on the ECJ.
"During that implementation period, it may mean we start off with the ECJ still governing the rules we are part of for that period,” said the spokesman.
“We are also clear that we can bring forward discussions and agreements on issues such as a dispute resolution mechanism. If we can bring that forward at an earlier stage we would wish to do so.”
Asked whether the UK Government was committed not to “put politics above prosperity”, as Mr Davis suggested other EU countries should be, the spokesman said: “What David Davis was speaking about was the close economic ties between the UK and Germany and emphasising that preserving jobs and prosperity must be at the forefront of negotiations.”