London, Jul 7 (IANS): British Prime Minister Theresa May and her Cabinet have reached a "collective" agreement on a "business-friendly" plan for Brexit.

Announced at the end of a crucial summit on Friday, the proposal seeks "to preserve frictionless goods trade with the European Union and avoid the border checks and tariffs" most feared by manufacturing companies, the UK media reported.

In a statement, the British leader said she would present the proposal to EU officials quickly. Both sides want a deal by October, before Britain leaves the bloc in March 2019.

May's proposal calls for the UK and the EU to establish a free trade area that would allow goods and agricultural products to move across borders without delays.

In return for unfettered access to its biggest export market, the UK would commit to following EU rules and regulations on goods. It would also accept a limited role for bloc's top court, the BBC reported.

The British government said the proposal marked a "substantial evolution" in its negotiating position and it included concessions that would maintain closer ties with the EU than May had previously sought.

However, certain elements of the proposal are likely to be unacceptable to the EU. The world's biggest trading bloc only grants unfettered market access to countries where all its citizens have the right to live and work. May wants to end this freedom of movement, replacing it with a vague "mobility framework."

According to the plan, banking and other UK service industries, which make up the vast majority of the UK economy, would lose some access to European markets.

But Britain's biggest business lobby group, the Confederation of British Industry, welcomed the announcement as a "good starting point".

The UK government plan also calls for a future customs arrangement under which Britain would collect EU tariffs on goods bound for the bloc. Doing so would allow Britain to set its own tariff rates and negotiate its own trade deals. Such a proposal would almost certainly be rejected by the EU.

"Of course we still have work to do with the EU in ensuring that we get to that end point in October. But this is good we have come today... to a positive future for the UK," May said.

She said the proposals, to be formally published in a white paper next week, would give the UK the freedom to strike trade deals with other countries.

EU's chief Brexit negotiator Michel Barnier reacted warmly to the proposals, tweeting that the "Chequers discussion on future to be welcomed. I look forward to white paper. We will assess proposals to see if they are workable and realistic".