Breaking: Brexit talks 'breakthrough' for Theresa May in EU negotiations

Following a deal struck overnight, talks over Britain’s withdrawal from the European Union will now enter the second phase of negotiations.

EU president Jean-Claude Juncker confirmed this morning the UK had made “sufficient progress” in meeting the necessary terms of the Brexit divorce bill.

Brexit breakthrough: UK business leaders 'breathing huge sigh of relief'It comes after Theresa May and David Davis headed to Brussels to meet with Mr Juncker and the EU’s chief Brexit negotiator, Michel Barnier.

The long-awaited announcement also followed talks which continued into the early hours between the Prime Minister and Democratic Unionist Party, Arlene Foster.

Mrs Foster said that “substantial changes” to the text rejected on Monday would mean there was “no red line down the Irish Sea” in the form of a customs barrier between Northern Ireland and the rest of the UK.

Mr Juncker said he will recommend that negotiations be broadened to future relations and trade.

He said: “I believe that we have now made the breakthrough that we needed”.

Mr Juncker said that he would recommend to EU leaders that “sufficient progress has been achieved” on the terms of the divorce to starting talking about issues like future relations and trade.

Mrs May said: "I very much welcome the prospect of moving ahead to the next phase, to talk about trade and security and to discuss the positive and ambitious future relationship that is in all of our interests."

She added: "The deal we've struck will guarantee the rights of more than three million EU citizens living in the UK and of a million UK citizens living in the EU.

"EU citizens living in the UK will have their rights enshrined in UK law and enforced by British courts. They will be able to go on living their lives as before."

On the issue of the UK's so-called "divorce bill", which is expected to total up to £50 billion, Mrs May said that in her landmark speech in Florence in September she had made clear the UK was "a country that honours our obligations".

She said: "After some tough conversations, we've now agreed a settlement that is fair to the British taxpayer. It means that in future we will be able to invest more in our priorities at home, such as housing, schools and the NHS."

And on the Irish issue, she said the UK would "guarantee there is no hard border and uphold the Belfast Agreement, and in doing so, we will continue to preserve the constitutional and economic integrity of the United Kingdom".

Elsewhere, Ireland's deputy prime minister Simon Coveney said the government was content at assurances it had achieved about avoiding a hard border. He said there was now "no scenario" that would result in new border checkpoints.

"Ireland supports Brexit negotiations moving to phase two now that we have secured assurances for all on the island of Ireland," he said.

He said the deal "fully protected" the Good Friday Agreement, the peace process and an all-Ireland economy.