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EU's Tusk says 27 leaders open internal work on Brexit phase two

European Council President Donald Tusk holds a news conference during a European Union leaders summit meeting in Brussels, Belgium, October 19, 2017. REUTERS/Dario Pignatelli

BRUSSELS (Reuters) - European Council President Donald Tusk said on Friday that 27 EU leaders meeting in Brussels had agreed to give the green light to internal preparations for the second phase of Brexit talks with London.

The 27 EU states want to be ready to move to talks with London about their post-Brexit relations after the chief divorce issues are settled in negotiations that are already taking place.

They have, however, stalled and British Prime Minister Theresa May failed to break the deadlock when she appealed to her EU counterparts during a Brussels dinner on Thursday night.

The 27 have said they hope they can announce enough progress in agreeing the exit terms with London in December to be able to start new talks with Britain on their ties after Brexit materialises, as is due in March, 2019.

German Chancellor Angela Merkel said on Thursday night talks with Britain were moving forward and were unlikely to break down.

(Reporting by Gabriela Baczynska; editing by Robert-Jan Bartunek)