British Prime Minister Theresa May urged EU leaders Thursday to urgently set out plans to move forward with Brexit negotiations, as her counterparts said there were some encouraging signs.

May's appeal came at a Brussels summit where the 27 other leaders were set to decide that there is insufficient progress on divorce talks to open negotiations on a future trade deal until December.

German Chancellor Angela Merkel said however that there were positive indications despite the deadlock over Britain's exit bill and other issues.

Arriving at the two-day summit, May urged the bloc to start preparations to discuss trade and a transition deal at the next summit in December, telling reporters they would be "setting out ambitious plans for the weeks ahead".

In a move to sway her colleagues on what is a key topic for them, May published an open letter to the three million European citizens living in Britain on Thursday promising they would not be asked to leave after Brexit in March 2019.

She said a deal to secure their rights was "within touching distance" -- but also told reporters that she wanted "urgency in reaching an agreement".

May will later make a personal address to the other leaders over a working dinner, before leaving early Friday when they discuss Brexit without her.

- 'Encouraging signs' -

Merkel said as she arrived that there were "encouraging signs to keep working to reach the start of the second phase" of talks.

But Dutch Prime Minister Mark Rutte said May "has to come up with more clarity" on her promises on the financial settlement in a speech she made in Florence in September.

"I phoned her last week, trying to encourage her," he added.

EU President Donald Tusk warned on Wednesday he did "not expect any kind of breakthrough", saying that while there had been "promising progress", London needed to come up with more concrete proposals.

Referring to the fact that the summit was moved from the EU's new building after a chemical leak in the catering area, Lithuanian Prime Minister Dalia Grybauskaite said on Twitter: "Lessons from #EUCO kitchen: fuming over #Brexit must not become toxic."

May engaged in a whirlwind of diplomacy ahead of the summit, calling the French and German leaders among others and having dinner with European Commission chief Jean-Claude Juncker in Brussels on Monday.

May walked into the summit room flanked by both Merkel and Emmanuel Macron, with the three leaders deep in conversation.

But European leaders have been increasingly vocal about their frustration at divisions in May's cabinet over Brexit, saying they are still unsure what Britain wants despite five rounds of Brexit negotiations.

The EU agrees that of the three key separation issues at stake, citizens rights is the most advanced, but sticking points remain. Discussions on the bill Britain must pay to leave are deadlocked and discussions on Northern Ireland still have far to go.

- 'Poorer and weaker' -

The slow progress has fuelled fears that Britain may fail to strike a withdrawal agreement before its formal departure on March 29, 2019, which could cause economic and social chaos of both sides of the Channel.

The former head of Britain's MI6 foreign intelligence agency, John Sawers, warned Thursday that Britain could be left "poorer and weaker" by Brexit and needing to spend more to maintain influence abroad.

Goldman Sachs chief executive Lloyd Blankfein meanwhile took to Twitter to say he would be "spending a lot more time" in Frankfurt, just stopping short of naming the German city as a post-Brexit headquarters.

Britain's exit bill is the most poisonous issue in the talks. In Florence, May promised to maintain Britain's contributions for two years after Brexit to complete the current EU budget period, totalling around 20 billion euros ($24 billion).

Germany and France insist that there should be no impact on the EU's budget from Britain's departure.

But European Parliament chief Antonio Tajani -- whose institution will have a final veto on any Brexit deal -- told the BBC that "20 billion is peanuts. The problem is 50 or 60 (billion euros)."

May is under pressure from senior Brexiteers at home, and a group urged her in a letter on Thursday to walk out of the talks if the EU does not agree to move on to trade.

Separately, Britain's opposition party leader Jeremy Corbyn held talks with leading European Union negotiators on Thursday, warning that leaving the EU without a deal would be "catastrophic".