World Bulletin / News Desk

EU leaders were set to agree Friday to start preparatory talks on the bloc's relationship with Britain after Brexit, offering some progress for embattled Prime Minister Theresa May to take back home.

German Chancellor Angela Merkel struck an optimistic note after a summit dinner on Thursday night, saying that despite delays in the negotiations, she could see "zero indications that we will not succeed" in reaching a final agreement.

Draft conclusions indicate they will delay the decision until the next summit in December, but they will agree to "start internal preparatory discussions" on trade and a possible transition deal.

The slow progress of the negotiations, particularly on Britain's financial settlement, stoked fears it could leave the EU in March 2019 without a deal in place, risking economic and legal chaos.

Merkel emphasised she did not want this, saying: "I want very clearly a deal and not some unpredictable solution, on this we are working very intensively."

May was due to join her 27 counterparts for a working breakfast on the future of the EU, before leaving them to discuss the state of Brexit negotiations.

The EU agrees that of the three key separation issues at stake, citizens' rights is the most advanced, but sticking points remain on the bill and Northern Ireland's border with Ireland.