THE UK will pull out of a major foreign policy arrangement as soon as possible after Brexit, Theresa May has announced.

The UK will regain full control over areas like diplomacy, peacekeeping, defence and aid in the early days of any implementation period, the Prime Minister said.

Speaking at the Munich Security Conference, May also set out proposals for a new treaty between the UK and the European Union to enshrine security co-operation – and warned of "damaging" consequences if a deal cannot be struck.

Common policy on foreign and security affairs grew out of the Maastricht Treaty in the wake of the war in Yugoslavia.

The move is likely to appeal to Brexiteers, but May stressed that Britain will continue to work closely with the EU on security and stressed the UK's commitment to protecting Europe from threats is unconditional.

May said: "There is no reason why we should not agree distinct arrangements for our foreign and defence policy co-operation in the time-limited implementation period as the Commission has proposed."

"We shouldn't wait where we don't need to," she added.

Under the current system, Britain was forced to take part in a summit in 2003 in Lisbon despite protesting over the attendance of Zimbabwean dictator Robert Mugagbe.

Gordon Brown boycotted the event but the government was obliged to send a representative.

In practice, the UK is still expected to maintain very close co-operation and No 10 sources insisted the move was about regaining sovereignty.

"In particular, we will want to continue to work closely together on sanctions. We will look to carry over all EU sanctions at the time of our departure," May said.

"Second, it is clearly in our shared interests to be able to continue to co-ordinate and deliver operationally on the ground.

"Of course, we will continue to work with and alongside each other. But where we can both be most effective by the UK deploying its significant capabilities and resources with and indeed through EU mechanisms – we should both be open to that.

"On defence, if the UK and EU's interests can best be furthered by the UK continuing to contribute to an EU operation or mission as we do now, then we should both be open to that.

"And similarly, while the UK will decide how we spend the entirety of our foreign aid in the future, if a UK contribution to EU development programmes and instruments can best deliver our mutual interests, we should both be open to that.

"But if we are to choose to work together in these ways, the UK must be able to play an appropriate role in shaping our collective actions in these areas."

May also called for an "open and inclusive approach" on defence capability projects following concerns the UK will be kept out of joint contracts.

The PM also urged Brussels to ignore the rule book and do whatever it takes to ensure the security of Europe is protected after Brexit.

Safety must not be jeopardised by "rigid institutional restrictions" and "deep-seated ideology", she said.

During a question and answer session, German diplomat Wolfgang Ischinger sparked a round of applause from the audience when he said it would be easier if Britain remained in the EU.

May then faced a second questioner suggesting Brexit should be ditched.

But the PM insisted Britain is leaving, adding there will be "no second referendum".