Keir Starmer’s attempt to reset relations with the EU have suffered a major blow, after negotiations for the UK to join the EU’s flagship €150bn (£131bn) defence fund collapsed.

The UK had been pushing to join the EU’s Security Action for Europe (Safe) fund, a low-interest loan scheme that is part of the EU’s drive to boost defence spending by €800bn and rearm the continent, in response to the growing threat from Russia and cooling relations between Donald Trump’s US and the EU.

Entrance to the scheme would have enabled the British government to secure a bigger role for its defence firms. In September, France proposed a ceiling on the value of UK-produced military components in the fund.

The UK and EU had been expected to sign a technical agreement on Safe after establishing an admi

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