The EU is prepared to make major concessions in negotiations to allow British and European 18-to 30-year-olds to travel and work freely, potentially paving the way for a long-awaited reset with Brussels.

A scheme that would allow thousands of young Europeans to live and work in the UK has been seen as a key EU demand in reaching a post-Brexit pact incorporating defence, energy and migration. It is understood that EU member states could now be willing to limit work visas to as little as 12 months, with quotas on numbers and restrictions on the sectors EU citizens could work in.

EU sources said the scheme would be rebranded the “youth experience” programme in order to eliminate any suggestion that it was reopening immigration routes for EU citizens wanting to live and work in the UK.

Some member states are also making a “strong ask” for the UK to return to the Erasmus+ university and vocational exchange programme and a deal to allow citizens to study in each other’s universities paying home fees. This is something of a non-starter for the UK because of the imbalance of students coming to Britain in the past compared to British studying in the EU.