NEW: UK negotiators have proposed stripping the valuable pelagic fishing industry out of the Brexit negotiations and instead have those stocks dealt with through an informal forum bringing together countries such as Russia, Norway, the Faroes, Iceland + Greenland, acc to sources

2/ The development reflects deepening divisions over the fisheries issue in the FTA negotiations. One EU official described the move as "very concerning"

3/ UK sources have also rejected suggestions that London was planning to re-nationalise the UK fleet by placing conditions on foreign ownership of British vessels. That issue was mentioned by @MichelBarnier during this morning's briefing of EU ambassadors

4/ On the pelagic questions, the UK is proposing that demersal stocks - whitefish, prawns etc - be dealt with in the current negotiations, but pelagic stocks (mackerel, whiting, Atlanto-scandian herring) be dealt with through the North East Atlantic Fisheries Commission (NEAFc)

5/ UK sources say this would simplify the fisheries talks, which have been deadlocked for months, by removing one element and have it dealt with in another forum

6/ EU officials say this would mean the UK having vastly greater leverage in the NEAFc because of the size of the mackerel stocks caught in UK waters, but that since members of the forum regularly breach fish quotas, then it risked overfishing of the mackerel stock

7/ The UK will become a member of NEAFc in its own right on January 1 and if pelagics are stripped out of the EU UK talks then it would negotiate with countries like Norway, the Faroes and Iceland, as well as the EU, each year on what each other's quotas share would be

8/ “We sign an agreed record, but it's a gentlemen's agreement.” says one EU official. “This is how much we're going to fish, this is how much you're going to fish, and we all promise faithfully this is what we're going to do.

9/ “There is no encouragement to reach an agreement. We've been messing around with Iceland for a full decade now + there's no sign of us ever reaching an agreement with them.

10/ "So, if [Iceland] can ignore the very strongly held views of a large trading partner, the EU, imagine what the UK will do,” says the official.

11/ UK sources have also confirmed it will look at ways to more closely tie the owner of a British registered vessels with economic activity taking place in the UK

12/ Sources have denied this will mean the UK re-nationalising its fleet, insisting that the UK will simply codify in UK law provisions that are already permitted under EU rules.

13/ In 1990, the European Court of Justice struck down a UK law which required majority British ownership of any vessels that were registered in the UK. The Factortame case was taken by a group of Spanish trawler owners who complained the requirement was contrary to EU law.