Norway could complicate UK's internal market access

“It’s not certain that it would be a good idea to let a big country into this organisation. It would shift the balance, which is not necessarily in Norway’s interests," she told Norwegian newspaper Aftenposten.

Norway gained access to the EU's internal market via its membership with the European Economic Area (EEA). The EEA includes all EU member states along with Norway, Iceland and Liechtenstein and includes the free movement of people, something the UK is likely to oppose.

It is not yet clear if the UK - which was a member till 1973 - wants to rejoin EFTA, which also includes Switzerland. The UK can join EFTA without becoming an EEA member.

But any renewed UK membership bid would require a unanimous vote among existing EFTA members, said Aspake.

The Guardian newspaper reports David Davis, UK's so-called Brexit minister, will hold talks on the issue with senior Norwegian officials in the next few weeks.

Economic uncertainty

The move comes after a new report by the London-based Institute for Fiscal Studies (IFS), which suggest Britain stands to lose billions from its withdrawal from the free trade bloc.

Any UK failure to negotiate a new trade deal following an EU exit will seriously hit Britain's GDP, Wednesday's (10 August) IFS report suggests.

It notes the UK needs to seal a new trade deal or risk facing an equivalent 4 percent loss of economic output. Although, the report notes new trade deals are "unlikely to compensate fully for EU trade".

IFS researcher Ian Mitchell in a statement said that the UK faces big economic choices in terms of future EU relations.

He also pointed out the large differences between having "access to" and a "membership of" the single market.

"Membership is likely to offer significant economic benefits particularly for trade in services. But outside the EU, single market membership also comes at the cost of accepting future regulations designed in the EU without UK input," he said.

Formal exit talks out, Russia in

Meanwhile, UK prime minister Theresa May says her government won't launch any formal exit talks before the end of the year.

She reiterated her position in separate telephone calls to Dutch prime minister Mark Rutte on Monday (7 August).

She has also spoken to Russia's president Vladimir Putin.

Both leaders pledged to smooth strained ties, despite western sanctions on Russia, Russia's support of the Syrian regime, and its invasion of Crimea.

"The prime minister and president agreed that British and Russian citizens faced common threats from terrorism, and that co-operation on aviation security in particular was a vital part of the international counter-terrorism effort," said a UK government spokesperson.