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British PM May fires starting Brexit gun

Press Association logoPress Association 29/03/2017 Guy Faulconbridge and Elizabeth Piper

Prime Minister Theresa May has filed formal Brexit divorce papers, pitching the United Kingdom into the unknown and triggering years of uncertain negotiations that will test the cohesion of the European Union.

Nine months after Britons voted to leave, May notified EU Council President Donald Tusk in a letter on Wednesday that the UK is quitting the bloc it joined in 1973.

The prime minister, an initial opponent of Brexit who won the top job in the political turmoil that followed the referendum vote, now has two years to settle the terms of the divorce before it comes into effect in late March 2019.

"The United Kingdom is leaving the European Union," May told lawmakers in the British parliament "This is an historic moment from which there can be no turning back."

The outcome of the negotiations will shape the future of Britain's $US2.6 trillion ($A3.4 trillion) economy, the world's fifth biggest, and determine whether London can keep its place as one of the top two global financial centres.

For the EU, already reeling from successive crises over debt and refugees, the loss of Britain is the biggest blow yet in 60 years.

Its leaders say they do not want to punish Britain. But with nationalist, anti-EU parties on the rise across Europe, they cannot afford to give London generous terms that might encourage other member states to break away.

May's notice of the UK's intention to leave the bloc under Article 50 of the EU's Lisbon Treaty was hand-delivered to Tusk in Brussels by Tim Barrow, Britain's permanent representative to the EU.

That moment formally set the clock ticking on Britain's two-year exit process. Sterling, which has lost 25 US cents against the dollar since the June referendum, rose almost half a cent on the news of the Brexit trigger reaching highs of $US1.2478.

May's six-page Brexit letter set a positive tone for the talks though it admitted that the task of extracting the UK from the EU was momentous and that reaching a comprehensive agreement within two years would be a challenge.

Within 48 hours, Tusk will send the 27 other states draft negotiating guidelines. He will outline his views in Malta, where from Wednesday he will be attending a congress of centre-right leaders. Ambassadors of the 27 will then meet in Brussels to discuss Tusk's draft.

Tusk said the EU would seek to minimise the cost to EU citizens and businesses and that Brussels wanted an orderly withdrawal for Britain.

"We already miss you," Tusk said. "Thank you and goodbye."

May has promised to seek the greatest possible access to European markets but said Britain will aim to establish its own free trade deals with countries beyond Europe, and impose limits on immigration from the continent.

She has acknowledged that those measures would require withdrawing from the EU 'single market' of 500 million people, founded on the principles of free movement of goods, services, capital and people.

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