The North's economy will be 12 per cent smaller in the next 15 years if the UK leaves the European Union with no trade agreement, according to a leaked government analysis of the economic impact of Brexit seen by Sky News.

The economy in the northeast of England, which voted to leave the EU, will suffer an even bigger fall of 16 per cent over the same period, Sky News reported.

UK prime minister Theresa May’s spokesman said he had not seen the specific details reported by Sky, and pointed to Mrs May’s response to the initial leak of the papers.

“She made the point that what it doesn’t model is the deal which she is actually seeking,” the spokesman said. – Reuters