The Brexit coordinator for the European Parliament confirmed talks can progress to the second phase after an agreemnt was made today.

But he said there were still five outstanding issues that need "to be tackled before an orderly withdrawal of the EU".

READ MORE: Brexit deal LIVE: UK WILL be free of shackles to launch global trade deals BEFORE Brexit

This includes extending coverage of current citizens rights to future partners to allow thier spouses and families to join them in Britain, adding families should be able to initate the procedure with one form and that the burden of proof should be on the Home Office.

"This important matter should be dealt with in the second phase of the negotiations and will inevitably be linked to the level of ambition of the future partnership between the EU and the United Kingdom," the Commission said.

And Brussels demaned that free movement of British citizens who are already residing in the EU can continue, along with ensuring commitments made with respect to Northern Ireland and Ireland are fully enforceable.

The European Commission document also reports "persisting disagreement" over whether the ECJ should be able to rule on disputes involving events which took place before Brexit but were not brought to court until after UK withdrawal, as well as the enforceability of ECJ decisions in the UK following Brexit.

Laying down his 'red lines' in the Brexit deal, Verhofstadt added that he wanted to see the development of an ombudsman who would be able to take the concerns of EU citizens for court.

While the status of the EU's only land border with the United Kingdom was perhaps the thorniest issue, the deal safeguarding the rights of 3 million EU citizens in Britain and around 1.2 million Britons living elsewhere in the EU will affect households across the continent.

London and Brussels agreed to offer equal treatment in social security, health care, employment and education and to let British judges ask the European Court of Justice to weigh in when necessary for eight years after Brexit.

But Jane Golding, who heads British in Europe, a coalition of 10 citizens' groups representing around 35,000 Britons living in the rest of the bloc, said fundamental issues had not been dealt with.

"The really big one is free movement, and we are worried that that is just simply going to be deferred until the next phase," Golding, a Briton who has lived in Berlin for nine years, told Reuters.

"In future, if you don't have the right of free movement, the right to go and work and live in those other countries and have your qualifications recognised in those other countries, you could be passed up for those opportunities, and that's going to impact your career," she said.

And Nicolas Hatton, co-chair of campaign group the3million, said he was unhappy that the deal backed Britain's stance of making EU citizens apply to remain in the country.

"All EU citizens here will need to apply to stay, while so far we were granted residents' rights," he told Reuters.

"This application process will be made with the Home Office and with the current hostile environment policy.

"We are very worried. There will be errors, there will be mistakes, people will be affected by these mistakes."

Verhofstadt's speech comes after Theresa May and Michel Barnier finally managed to agree "sufficient progress" had been made on talks – moving negotiations onto trade and treaties after months of stalling from the EU's chief negotiator Michel Barnier.

The deal was preempted by signs of a breakthrough from Brussels – with Mr Juncker's right hand man Martin Selmayr posting a picture of white smoke on Twitter an apparent reference to the manner in which the Vatican signals the choosing of a new pope.

Meanwhile Theresa May's top aide, chief of staff Gavin Barwell, remarked it had been a "long week".

And insiders have confirmed the Prime Minister spent much of the night locked in a phone conversation with DUP leader Arlene Foster to ease concerns over the Irish border. 

Meanwhile the Downing Street Christmas Party got underway, with one aide saying celebrations were “going on around the Prime Minister” during the auspicious evening.

Her spokesman said: “The text kept changing until it was in a place where everybody felt it was what we needed to achieve.”

But despite the Prime Minister’s home being taken over by festivities, her focus remained on securing a deal.

A Spokesman said: “The Prime Minister had a tough day yesterday, there was a lot of work to be done, a lot of conversations to be had.

“We’re pleased we’ve got to the place we are this morning.”

Eurocrats revealed they may open the door for Britain to negotiate trade deals around the world during a transition period in a big boost for Mrs May after last night's agreement.

EU officials said member states have not ruled out giving their consent for the UK to actively seek free trade agreements across the globe even whilst still in the Single Market and Customs Union. 

The remarks will be seen as a significant olive branch to Downing Street, which has always maintained Britain must be able to plan for its future whilst decoupling itself from the bloc. 

Diplomats also said that member states are now likely to get more closely involved in talks on a second phase of negotiations on trade, having taken a hands-off approach to the technical divorce issues.