NEW: UK planning legislation to override key parts of #brexit withdrawal treaty and Northern Ireland protocol - a potentially HUGE move in negotiations; major ructions in Whitehall - my latest via @FT https://on.ft.com/2FeQyY4 

Per three sources with knowledge of plans the UK Internal Market bill (due on Weds) and this autumn's Finance Bill will contain clauses that “eliminate the legal force of parts of the withdrawal agreement”. The EU are unlikely to like this - which I guess is the point /2

Given @MichelBarnier
insistence on the "precise implementation" of the Withdrawal Agreement, the decision to legislate in a way that dilutes those obligations - on State Aid, export summary declarations and tariffs - is not likely to go down well with the EU /3

A person familiar with the plans said they would “clearly and consciously” undermine the agreement on Northern Ireland that Boris Johnson signed last October - but which in the light of the diamond-hard Brexit he's negotiating, now looks very difficult. /4

A second person familiar with the plans said they were a "blunt instrument" that would directly "set up UK law in opposition with obligations under the withdrawal agreement, and in full cognisance that this will breach international law.” /5

A lot of Whitehall is *deeply* uncomfortable with this approach.

Foreign Office not sure how it can criticise China for not meeting international obligation if UK is paring back obligations of a Treaty it signed in less than a year ago.

Or help Int Trade dept sign deals /6

Brexiters - who have been calling on @BorisJohnson to ditch the Withdrawal Agreement - will like this move.

And in a 'no deal' scenario, where the UK seeks untrammeled sovereignty, it has a powerful logic. /7

The problem is that @BorisJohnson promised to remove the UK from the EU "whole and entire" - but it has become clear that his Northern Irish 'frontstop' does not do that to the satisfaction of Brexiters.

See this @CentreBrexit report: /8 https://centreforbrexitpolicy.org.uk/publications/replacing-the-withdrawal-agreement-how-to-ensure-the-uk-takes-back-control-on-exiting-the-transition-period/

The biggest problem is Article 10 - which says that Northern Ireland must follow EU state aid rules AND that EU law (Annex 5) shall apply to the *United Kingdom* (and not just in respect of Northern Ireland. /9

For Brexiters that creates a potential huge trojan horse for Brussels to reach back into UK policy even in the event of a "clean-break" not deal - the UK Govt would have to notify Brussels of S.Aid decision that impacted companies in NI. /10

Sources say that UK Internal Market Bill will contain "notwithstanding clauses" - i'e 'notwithstanding our obligations under the protocol' define in a far narrower way what the Northern Irish Protocol means on state aid and unfettered access for NI trade to GB. /11

As @jamesrwebber of Shearman & Sterling tells me, this would effectively work to supersede elements of the Protocol, and define its scope more narrowly in legal terms. /12

The plan - which I understand has been backed personally by @DavidGHFrost
would “clearly and consciously” undermine the Protocol....which both sides were working hard to implement. The move divided Whitehall at the highest levels. /13

A goverment said it was “working hard to resolve outstanding issues” with the Northern Ireland protocol in good faith. But added: “As a responsible government, we are considering fall-back options in the event this is not achieved to ensure the communities of NI are protected”/14

There are those who believe passionately that - in a deal scenario - the NI Protocol can still be made to work, but the harder the #Brexit that is being negotiated, the harder that becomes. /15

Recall that the @BorisJohnson 'frontstop' was negotiated with the Political Declaration along side it - a declaration that talked about a State Aid regime, a level playing field between both sides and a comprehensive FTA. All of that now looks very distant /16

So if we really are heading for 'no deal', a free hand on State Aid and sovereignty is the priority above all else - then it is hard to see how this government could live with Protocol as it stands /17

Is this a gambit? A move to try and force the EU to re-write the protocol or - if not - have a hands-free 'no deal' all the same.

I've been doing this long enough (think back to Oct 2019) not to make foolhardy predictions....we'll have to see. /18

How the EU reacts will be interesting. It may depend just how brazenly the legislation cuts across the Protocol.

@MichelBarnier has been determinedly calm these last few months - he may remain so. Wait and see how it plays out. I don't know. /19

But this does feel to those familiar with the plans like a major move by a govt increasingly resigned to a 'no deal' or 'Australian' exit - and one that risks calling into question the reputation of the UK as a country that negotiates in good faith. Let's see. ENDS