At Brexit summit in Brussels UK, EU leaders finalise divorce.

European Union leaders approved the terms of a historic Brexit deal on Sunday, with one declaring Britain's withdrawal a "tragedy", but holding out hope of close future ties.

Arriving for a special summit in Brussels, European Commission President Jean-Claude Juncker, head of the bloc's executive arm, said it was a "sad day".

"To see a country like Great Britain... leave the EU is not a moment of joy nor of celebration, it's a sad moment and it's a tragedy," he said.

Michel Barnier, the former French foreign minister who negotiated the deal on behalf of the bloc, added: "We will remain allies, partners and friends."

The leaders of the 27 EU states approved the agreement before being joined by British Prime Minister Theresa May in a highly symbolic moment.

"EU27 has endorsed the Withdrawal Agreement and Political Declaration on the future EU-UK relations," EU Council President Donald Tusk announced on TWITTER.

Forged during 17 months of tough negotiations, the deal covers financial matters, citizens' rights, Northern Ireland and a transition phase, and sets out hopes for future security and trade ties.

But it is not the final stage, as the House of Commons in London must still approve the deal before Brexit day on March 29, 2019 – and many MPs have warned they will not back it.
Until the agreement is approved, all sides are still planning for the potentially disastrous possibility that Britain ends its four-decade EU membership with no new arrangements in place.

Media reports in London on Sunday suggested some of May's own ministers were secretly working with EU diplomats on a "Plan B" in case parliament rejected the agreement next month.

But Dutch Prime Minister Mark Rutte warned as he arrived in Brussels that there was little point in going back to the negotiating table.

"Overall, I think this is the max that we can all do, both Theresa May and her government as well as the European Union," he said.

"No victors here today, nobody winning, we're all losing – but given that context, this (agreement) is acceptable."

'Reduce risks and losses'

Donald Tusk, who has always said he would prefer Britain not to leave, said on the eve of the summit that "no-one will have reasons to be happy" when Brexit happens.

But he said terms had been agreed that would "reduce the risks and losses", and he had recommended that EU leaders sign off on the deal.

Lithuania president Dalia Grybauskaite said as she arrived: "We will endorse the Brexit agreement, but there is nothing good for any side because it is withdrawal from the EU."

In London, eurosceptics in May's Conservative party and their Northern Irish allies warn they will not support the agreement, which they argue keeps Britain too close to the EU.

But in an open "letter to the nation" on Sunday, May said it delivered on the 2016 referendum vote to leave, and was a "deal for a brighter future".

Britain remains deeply divided over the decision, but the prime minister said that finally leaving could be "a moment of renewal and reconciliation".

"To do that we need to get on with Brexit now by getting behind this deal," she said. 

Gibraltar tensions

The summit risked being derailed by a late objection to the deal by Spain over the British territory of Gibraltar.

Prime Minister Pedro Sanchez threatened to reject it unless his country kept a veto over future changes to EU ties with "The Rock", which borders Spain and which it has long claimed.

The impasse was resolved when Britain promised to continue bilateral talks with Madrid after Brexit – although that itself caused further tensions.

Sanchez claimed that discussions would cover the "co-sovereignty" of Gibraltar, something residents overwhelmingly rejected in a 2002 referendum.

May, who arrived in Brussels on Saturday evening for final talks with Tusk and Juncker, was quick to correct her Spanish counterpart.

"The UK's position on the sovereignty of Gibraltar has not changed and will not change," she said.

In legal terms, Spain's disapproval would not have halted the divorce settlement.

Fishing rights

But it would have been an embarrassing split for EU leaders who have proved remarkably united in the painful negotiations.

British MPs are most concerned about an arrangement in the withdrawal agreement to keep open the border between British Northern Ireland and Ireland, which could see the province follow EU rules for years.

But there are also concerns in EU capitals about fishing rights and commercial rules Britain must follow to maintain access to the bloc's markets.

A diplomatic source said the minutes of Sunday's summit meeting of the 27 leaders would record those concerns.