By Alistair Smout
LONDON (Reuters) - Britain said on Saturday it would not "capitulate" to EU demands in Brexit talks and again urged its partners to engage with its proposals, as French and German ministers suggested the next move in the negotiations should come from London.
British Prime Minister Theresa May on Friday demanded new proposals and respect from European Union leaders, saying after a summit in Austria that talks had hit an impasse - a position her foreign minister reinforced on Saturday, even if that meant leaving the bloc next March without a deal.
"If the EU's view is that just by saying no to every proposal made by the United Kingdom, we will eventually capitulate and end up either with a Norway option or indeed staying in the EU... then they've profoundly misjudged he British people," Jeremy Hunt told BBC radio.
"We may be polite, but we have a bottom line. And so they need to engage with us now in seriousness."
May's defiant statement was welcomed on Saturday by many in the British press that had seen the Salzburg summit as a failure for her. The strongly eurosceptic Daily Express said it was "May's finest hour".
But initial reactions from across the English Channel suggested France and Germany were digging in too.
EU leaders and May have said they want to get a deal agreed in October, to be finalised in November.
In Paris, Minister for European Affairs Nathalie Loiseau said that, while France still believed a good Brexit deal was possible, it must also prepare for a 'no deal' outcome.
Britain's vote to leave "cannot lead to the EU going bust," she said on France Info radio. "That's the message we have tried to send for several months now to our British counterparts, who may have thought we were going to say 'yes' to whatever deal they came up with."
In Berlin, German Deputy Foreign Minister Michael Roth said the other 27 EU states were striving to achieve reasonable solutions. "The blame game against the EU is therefore more than unfair. We can't solve the problems that are arising on the island (Britain) due to Brexit," he said on Twitter.
In London, the pro-Brexit Daily Telegraph reported that May faced the prospect of ministerial resignations next week if she failed to come up with an alternative to the "Chequers" Brexit plan that she presented in Austria.
But domestically, even some critics of May's plan backed the prime minister in her standoff against the EU.
"I have a serious difference of opinion with our prime minister. But, even so, I have to tell you that I view the behavior of the European Union leaders in Salzburg with contempt," David Davis, the former Brexit minister who resigned in protest at Chequers, said in a speech at a "Leave Means Leave" rally in the northern English town of Bolton.
"Disrespect our prime minister, and you disrespect our country."
After May's Friday statement, European Council President Donald Tusk said that the results of the EU's analysis of that plan had been known to Britain for many weeks. But Hunt said there was a difference between rhetoric and substance.
"On the substance of the Chequers proposals, we have not had a detailed response," he said, adding that EU proposals for the Irish border would mean that it was impossible "to leave the EU intact as one country".
May has accepted the need for a "backstop" insurance policy on the Irish border, but says the EU's version of the proposal would see Northern Ireland carved off from the United Kingdom.
The EU says May's proposal, keeping the province and mainland Britain in the same regulatory space, undermines the single market.
Despite the differences, Ireland's Foreign Minister Simon Coveney told RTE radio an Irish backstop was "doable" by an October summit.
BUMPY AND DIFFICULT
Hunt said Britain wanted a deal but would be able to withstand a no-deal Brexit.
"Even in a situation where we aren't able to come to an agreement, we would be trading on World Trade Organisation terms. It would be bumpy, it would be difficult, but we would find a way to survive and prosper as a country," Hunt said.
"We've had far bigger challenges in our history."
In Berlin, magazine Der Spiegel said Germany's government expected the impact of a no-deal Brexit on its labor market to be "relatively small". It cited a government response to a request for information from the far-left Linke party.
However, the Times reported that Bank of England Governor Mark Carney had told May's ministers that no Brexit deal could mean a fall of GDP in the rest of the EU of between 1 and 1.25 percent, without citing sources. The BoE declined to comment.
(Reporting by Alistair Smout; additiional reporting by Michel Rose in Paris, Michelle Martin in Berlin and Conor Humphries in Dublin; editing by John Stonestreet and Gareth Jones)