Both Spain and the Netherlands have agreed to push for a Brexit deal “that keeps Britain as close to the EU as possible”, it has been reported.

Theresa May wants barrier free trade with the EU to continue for all-important services as well as goods.

She is expected to also ask Brussels to allow the UK to diverge from its rules and regulations, but German Chancellor Angela Merkel has branded it “cherry-picking” and has promised to forbid it.

The Pound soared upon news of the reported agreement between Spain and the Netherlands.

Sterling today hit $1.37 - its highest level against the US dollar since it fell dramatically following the UK’s vote to leave the Brussels bloc.

The agreement between Spain and the Netherlands has come despite boy Germany and France attempting to hit the UK with tougher conditions for market access, it has been reported.

The leaders of the Netherlands, Italy, Poland, Hungary and Ireland have all publicly called for the EU not to punish the UK for Brexit.

However, Spain still is demanding a say on Gibraltar’s future and Brussels has given it a veto on any Brexit deal over it.

The news comes after Spanish Prime Minister Mariano Rajoy last month admitted the UK is an “indispensable partner” to Spain and the EU.

Speaking at European Council meeting last month, Mr Rajoy highlighted the need to maintain relations between the UK and Brussels after Brexit.

Hailing the achievements of both Brexit negotiating teams in concluding stage one of talks, he said Spain would need an agreement with the UK during any transitional deal, to maintain “fantastic relations” between the two countries.

Mr Rajoy said: “Any future agreement between the UK and the EU needs an agreement between Spain and the United Kingdom. That must be applied during the transitional period.

“We want the best relations with the UK. Britons in Spain will be respected, as well as Spaniards living in the UK.

“We want the UK to keep investing in Spain. We want to keep our fantastic relations with the UK.”