The paper says Britain can use data gathered before Brexit once the UK has left the EU, as long as it continues to apply the same level of data protection. If it doesn't, the data must be destroyed.

It also says that Britain will lose access to ‘networks, information systems and databases’ on the date of withdrawal. It goes on: ‘The United Kingdom may keep and continue to use data in the United Kingdom before the withdrawal date only if the conditions set out in this paper are fulfilled'.

Research from the Direct Marketing Association found that 76% of businesses want to retain access to the digital single market post-Brexit. Chris Combemale, CEO of the DMA group, said: "The EU’s current position is not just a threat to the UK economy, but to success of Europe as a whole. Maintaining the free flow of data is essential for future growth both on the continent and in the UK.

"The EU’s paper starkly illustrated that not reaching an agreement on this issue poses a real risk to every data-driven business in the UK, which is to say almost every company."

He added that the paper made  no mention of the status of the UK’s ICO and retaining a position on the European Data Protection Board, something the UK Government made clear it would want to retain.

Dr Michelle Goddard, director of policy & standards, Market Research Society said: " The EU request for proper data protection standards is in line with the recent UK Statement of Intent that signalled the UK Government was looking to data protection adequacy after Brexit.

"Adequacy of the data protection framework – GDPR equivalency after Brexit – is critical for a continued vibrant research sector. Researchers involved in cross-border projects processing personal data of EU residents will need to be able to continue with cross-border data flows. The UK has signalled it will implement a robust data protection framework based on the GDPR but it will be interesting to see the full detailed legal provisions on publication of the UK Bill."