THERESA May has been warned not to “treat Scotland with contempt” as the diplomat who penned Article 50 warned of “serious economic disruption” following a strong chance no Brexit deal would be secured between the EU and the UK.

Lord Kerr suggested leaving the EU could result in a “decade of delay and disruption” which would damage investment, economic growth and employment. “As Article 50 says, if there is no agreement and no extension, the departing country departs. So, out we go into serious economic disruption and a degree of legal chaos,” he said at a lecture at Glasgow University.

He described the Scottish Government’s Scotland in Europe paper, which set out plans for either the UK, or Scotland on its own, to be able to remain in the single market as “rather impressive”.

However, he added this “serious and substantive white paper” does “seems to have been ignored” by the Westminster administration.

On Tuesday, the Prime Minister rejected staying in the single market or pursuing a special arrangement for Scotland, though she has yet to give her formal response.

She told her audience in London: “We seek a new and equal partnership...Not partial membership of the European Union, associate membership of the European Union, or anything that leaves us half-in, half-out.

“We do not seek to adopt a model already enjoyed by other countries. We do not seek to hold on to bits of membership as we leave. No, the United Kingdom is leaving the European Union.”

At the latest joint ministerial committee (JMC) meeting in London yesterday ministers from both the UK and devolved nations discussed Nicola Sturgeon’s proposals.

Afterwards SNP Brexit minister Michael Russell said he was disappointed with May’s stance on Tuesday but insisted May had not rejected a differentiated deal for Scotland.

He said: “I made it absolutely clear at today’s meeting that Scotland must not be treated with contempt but as an equal partner in the negotiating process.”

“It is extremely disappointing that the Prime Minister chose to disregard the process and make a significant announcement about her position two days before the JMC even considered our paper.” He added: “Our focus now is to ensure the UK Government takes seriously our objective of keeping Scotland in the European single market. They need to demonstrate that this is the case because the clock is ticking. The views and economic interests of the people of Scotland cannot be disregarded and brushed aside.”

Last night, UK Brexit minister Davis described the Scottish Government’s Scotland in Europe paper, as an “important contribution” though raised questions about the practicalities of implementing its plans.

He added: “Brexit is a chance for us to build a stronger UK and strengthen the union between our four nations. It is only by us coming together that we can fully grasp the opportunities our departure presents.”

At Glasgow University, Kerr, who has served as UK ambassador to both the EU and the US and who negotiated European deals for both Margaret Thatcher and John Major, said the possibility of no Brexit deal being reached could be as much as much as one in three.

Reports have suggested the UK could be presented with a “divorce bill’’ by the European Commission which could be as much as £50 billion to £60 billion.

Lord Kerr said: “Article 50 is not about trade, it is about divorce. It’s about paying the bills, dividing the property. The money negotiation is going to be a very nasty negotiation.”

He went on to predict there will be “no serious negotiations before the autumn”, adding he expects “this calendar year will be mainly spent in a furious battle about money”.

He also warned that talks with the dozens of nations the EU has trade agreements with would not be able to take place until the Brexit process has been completed, telling the audience: “We can expect, I’m afraid, a decade of delay and disruption with investment, economic growth and employment lower than they would have been.”