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Media signatureEU President Ursula von der Leyen said the bill violated Britain’s previous commitments.
The EU has launched legal proceedings against the UK after refusing to abandon plans to suspend parts of its Brexit divorce deal.
An EU motion to the government to remove parts of the single market law passed by MPs on Wednesday.
The “letter of resignation” could eventually lead to legal proceedings against the government in the EU’s highest court.
Britain said it would respond “in due course”.
European Commission President Ursula von der Leyen said the UK had until the end of November to respond to EU concerns about the bill.
However, the EU will continue talks on a post-Brexit trade deal in Brussels. Prime Minister Boris Johnson said both sides should “move on” if an agreement is not reached by mid-October.
In a brief statement, Ms von der Leyen said the bill was “completely at odds” with previous UK commitments on how to avoid a hard border on the island of Ireland.
A UK government spokesman said the bill was a necessary “safety net” to protect trade between different parts of the UK.