By Jason Douglas 

LONDON--U.K. Prime Minister Theresa May said Sunday that Britain won't agree to pay an exit bill for leaving the European Union without also agreeing a new trade deal with the bloc, highlighting a hard-to-resolve division between the opposing camps ahead of talks on Brexit.

In an interview with the British Broadcasting Corp., Mrs. May reiterated a longstanding British position that reaching agreement over the terms of Britain's exit and its future relationship with the EU must be done together.

The EU, which on Saturday set out its core positions on Brexit after a summit of leaders, wants a phased approach to negotiations, with Britain agreeing to settle its outstanding liabilities to the EU and other divorce issues before talks turn to trade. The EU calculates the U.K. could owe it EUR55 billion to EUR60 billion ($60 billion to $65 billion) to settle commitments made to the EU budget but not yet paid.

"I'm very clear that at end of the negotiations we need to be clear not just about the Brexit arrangements--the exit, how we withdraw--but also what our future relationship is going to be," Mrs. May said on the BBC's Andrew Marr Show.

Asked if that meant the U.K. wouldn't agree to settle any divorce bill until all negotiations are finished, including those covering trade, Mrs. May said: "The EU itself has said that nothing is agreed until everything is agreed."

The impasse represents an early challenge for negotiators when Brexit talks formally begin following a national election in the U.K. on June 8. Opinion polls point to victory for Mrs. May and her governing Conservative Party, a win she says would strengthen her hand in Brexit talks with the EU's remaining 27 members.

On Saturday, European Council President Donald Tusk said EU leaders had backed a phased approach to negotiations, saying that for talks to move on to a post-Brexit trade deal, there would need to be unanimous agreement among EU leaders. Some EU leaders expressed frustration with the British position, saying London doesn't understand what it would take to resolve key divorce issues the bloc wants tackled before talks on the future relationship can begin.

Mrs. May acknowledged Sunday that Brexit talks will be tough, but said she is confident the two sides can reach a deal.

Write to Jason Douglas at jason.douglas@wsj.com

(END) Dow Jones Newswires

April 30, 2017 06:22 ET (10:22 GMT)

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