Britain's House of Lords begins scrutiny of a key piece of Brexit legislation yesterday, as a leaked government report said Britain would be worse off whatever deal it strikes with the EU.

Almost 200 peers have requested to speak during the two-day debate on the EU (Withdrawal) Bill, many of them likely to be critical of its provisions to smooth Britain's exit from the European Union, threatening another headache for Prime Minister Theresa May as she battles criticism from her own party.

Negotiations between Britain and the EU are due to start again in March, but an economic impact assessment, drawn up for the Brexit ministry by various government departments and seen by the BuzzFeed News website, predicted that growth would be lower, whatever the final deal.

The January 2018 study, titled "EU Exit Analysis", examined three of the most plausible Brexit scenarios and estimated that growth would be between two percent and eight percent lower over the next 15 years.

The withdrawal bill would repeal the 1972 act that made Britain a member of the bloc and transfer four decades of EU regulations onto the British statute books.

May's government suffered one defeat when the bill went through the elected lower House of Commons late last year, after MPs demanded a vote on the final exit deal struck with Brussels.

Peers in the unelected upper House of Lords are threatening further amendments, including on new powers for ministers to amend the EU laws as they are moved across, which a Lords committee said were "wholly unacceptable".