In the first major bust up over the next stage of negotiations, the Brexit Secretary complained proposals to sanction Britain were “not in good faith”.
He said the talks were meant to be about “building a bridge” but that instead Brussels had come up with a “political document” that “is not the aim of this exercise”.
Mr Davis was responding to a draft EU paper that suggested suspending Britain’s access to the single market in the event of a dispute between the two sides during the transition.
Negotiators agree there should be an “implementation period” of around two years – but that the UK’s formal membership will expire when Article 50 runs out in March 2019.
Mr Davis told Sky News on Thursday: “I do not think it was in good faith to publish a document with frankly discourteous language and actually implying that they could arbitrarily terminate in effect the implementation period.”
“That’s not what the aim of this exercise is, it’s not in good faith and we think it was unwise to publish it.”
He was speaking following day two of Theresa May’s Brexit war cabinet, which saw ministers thrash out ideas for what the UK’s future relationship with the EU should be.
Mr Davis called the atmosphere “very constructive”, admitting there were “still things incomplete” but that “a great deal of progress has been made”.
Quizzed on the Government’s own Brexit impact assessment leaked to Sky News that showed regions in the UK could suffer a hit to GDP of up to 16% over 15 years, the Brexit Secretary played down the report.