EUROPEAN Union chief Brexit negotiator Michel Barnier said the UK's green light to the draft Brexit agreement marks a "decisive and crucial step" towards an "orderly withdrawal".

He said the UK would remain "a friend, a partner and an ally", that there was "still a lot of work" to be done and that the future relationship will be on the basis of duty and quota-free trade.

And he warned: "The two negotiating teams have taken their responsibility. The British government has taken today its responsibility. Now, everybody on both sides has to take their responsibility."

Guy Verhofstadt, the European Parliament’s Brexit coordinator, also backed the agreement, saying that negotiators had tried to “make the best” of the bad situation.

Mr Barnier reassured the three million EU citizens in the UK and the one million British citizens living in an EU country that they could continue to live, study and work there throughout the transitional period and "throughout their lifetime".

Britain would leave the EU and all its institutions on March 29, 2019 but there would be a planned transitional period to December 31, 2020 to "allow business to prepare and adapt before implementation".

The UK has agreed to be bound by a UK-wide Brexit "backstop" which will effectively keep Britain in a customs union with the EU if the prime minister fails to secure an alternative arrangement before the end of the two-year Brexit transition period.

A customs union reduces administrative and financial trade barriers such as customs checks and charges, and boosts economic co-operation.

Mr Barnier said the single EU-UK customs territory, of which Northern Ireland would be a part, would mean that UK goods get tariff and quota-free access to the EU market.

The transitional period could be extended "once" for a limited period by joint agreement.

And Mr Barnier was positive about the EU relationship with the UK saying: "We are drawing the basis for an ambitious partnership, which we want, which is a free trade area based on regulatory and customs co-operation in depth and with a level playing field.

"Our objective is to abolish customs duties and quotas for all goods based on what we are proposing in the withdrawal agreement, a single customs territory."

He spoke after briefing ambassadors from the 27 member states in Brussels, as part of a carefully choreographed response to the agreement reached, including the controversial Irish backstop which aims to guarantee that physical checks will not be reintroduced at the border with the Irish Republic, in the event this is not settled by a UK-EU trade deal.

He explained that Northern Ireland would stay in the same customs territory as the rest of the UK but that the region would remain aligned to some EU regulations to avoid a hard border.

That means that goods coming into Northern Ireland would need to be checked to see if they meet EU rules "in the least intrusive way possible".

Both sides resolved to ensure the backstop is not necessary by coming up with alternative arrangements.

Mr Barnier said if this is not possible by July 2020, the transition period could be extended - and if it is still not settled by the end of the transition, the backstop would "kick in".

This would involve a joint UK-EU "single customs territory", so customs checks are not needed on the border.

Northern Ireland would stay aligned to the EU single market rules that are "essential for the avoidance of a hard border", Mr Barnier added. He said the backstop plan had "evolved considerably" and had been based on the UK's proposal.

He said: "If we are not ready by July 2020, we could jointly decide to extend the transition to provide for more time

"This backstop is not meant to be used. Our objective remains to reach a new agreement between the EU and the UK before the end of the transition."

In closing, Mr Barnier said:"It is the basis of a plan. We are going to start working with the 27 member states, and I will start tomorrow with the European Parliament on this draft political declaration.

"We have reached an important moment in this extraordinary negotiation which we entered into at the request of the United Kingdom. There is still a lot of work.

"I know that the path is still long and may well be difficult to guarantee an orderly withdrawal. And beyond the orderly separation to build something, to build an ambitious and sustainable partnership with the UK."

In Dublin, the Taoiseach said he as " pleased" an agreement had been reached on a draft Brexit Withdrawal Treaty and added: "Avoiding a hard border has proven to be one of the most difficult challenges. What has become know as 'the backstop' is now fully spelt out in the Withdrawal Agreement.

"These negotiations have been a tough, difficult experience for everyone involved. I want to acknowledge Prime Minister May’s integrity in honouring her promise to protect the Peace Process & Good Friday Agreement. She has been true to her word."

Finland's PM Juha Sipila tweeted: "The British government approved a negotiated follow-up to the Brexit settlement.

"The step is important but decisions on both sides are still needed for final agreement."

Dutch foreign minister Stef Blok wrote on Twitter: "It is a good step that a draft agreement has been reached by the negotiators."