The European Parliament rejected the UK’s brand-new offer on the rights of EU citizens living in the UK after Brexit, Independent reported.

On Tuesday, the Government released a technical paper spelling out the details of a two-year grace period for EU nationals to apply for settled status once the UK leaves the bloc so that they can continue their lives in the UK.

The Parliament's cross-party Brexit steering group however today said there were still "major issues" to be resolved while Brexit coordinator Guy Verhofstadt criticised the "inadequate" proposal.

"EU citizens in the UK and UK citizens in the EU were told that nothing would change because of Brexit. The fact that the UK Government needs 25 paragraphs to explain how they lives will change proves this was a fabrication," the European Parliament’s Brexit coordinator Guy Verhofstadt noted.

"It's hard to believe this proposed new system will be smooth and efficient. The European Parliament remains deeply concerned about the lack of progress on citizens' rights issues. It is erroneous to say a deal is 'within touching distance'."