Britain will be forced to pay significant financial penalties if a future government pulls out of Sir Keir Starmer’s planned reset deal with the European Union under a draft Brussels plan dubbed the “Farage clause”.

A proposed EU-UK “veterinary agreement” to remove red tape and ease border friction for British food and drink exporters is under negotiation.

According to a draft text, a “termination clause” in the agreement, a standard provision in international trade agreements will require Britain to pay the full costs if a Reform or Conservative government chose to exit the agreement.

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The Financial Times reported that EU diplomats described the clause as a “safety provision to provide stability and a deterrent for Farage and Co” beyond the Westminster parliamentary term, which ends in 2029.

“The EU wants an agreement long term and not only until 2029, should a change happen at the next election,” a diplomat told the newspaper.

Other European diplomats stressed that the clause is a standard one requiring either party, London or Brussels, to pay for costs of setting up “the infrastructure and equipment, initial recruitment and training, in order to set up the necessary border controls”.

“It cuts both ways,” said a Brussels diplomat. “Why should either of the parties be left picking up the bill for a decision by the other to pull out of an agreement? Obviously the UK’s political future is potentially volatile and that is a factor for the EU.”

The clause in the draft EU text is not thought to be controversial but negotiations continue on the “participation fee” Britain will be asked to pay, based on payments that will, under current Brussels demands, be higher than the proportional costs of food safety and animal welfare border checks.

The government has already agreed to “dynamically align and simultaneously apply” all EU legislation governing animal and plant products which require British legislative and regulatory change.

Ministers face being forced to repeal post-Brexit laws from 2023 that allow crops to be genetically altered after the deal to bring Britain into line with restrictive EU regulations on gene crop technology.

Both Farage’s Reform and Kemi Badenoch’s Conservative have pledged to pull out of the agreement if they enter government.

Speaking on Friday, Farage vowed to “fight this giveaway” and accused Starmer of “doing his best to give away our parliamentary sovereignty, to give away our rights as voters”.