European Union nationals living in the UK before the formal Brexit process is triggered should be allowed to remain in the country permanently, an expert panel has recommended.
Prime Minister Theresa May's refusal to agree the status of the nearly three million Europeans in the country unless the rights of Britons living on the continent are guaranteed is "morally wrong", according to an inquiry run by think tank British Future.
It called for the UK to "make the first move" to demonstrate "goodwill" as it embarks on its divorce negotiations.
The panel, which included a cross-party group of MPs, said all 2.8 million EU nationals should be eligible for permanent residence with the same health, social and education rights as British citizens.
If found that setting the date that Article 50 is triggered as the cut-off point would be fair and legally watertight but would not lead to a surge in migration from across the bloc and European Economic Area nations.
Labour's Gisela Stuart, a Leave campaigner who chaired the inquiry, said: "Our inquiry found that people from different sides of the referendum and politics can quite easily agree on practical, straightforward ways to ensure that EU nationals can stay in Britain with their rights protected. That's the right thing to do and something that most voters agree with too.
"We determined that the triggering of Article 50 should be the cut-off date, after which EU citizens moving to the UK would not be entitled to stay permanently after Brexit. This would limit any 'pull factor' for EU citizens not already in the UK.
"Britain should make clear at the start of the Brexit negotiations that EU citizens already here before that date can stay. This would send a clear signal about the kind of country the UK will be after Brexit and the relationship we want with Europe. We should expect reciprocal deals for Britons living in European countries, but Britain should make the first move to demonstrate goodwill."
Just 3% of European citizens living in Britain are unemployed, with 51% classed as employees, 9% self-employed, 4% students and 7% retired while 17% are children, according to the report.
More than a quarter of the food and drink manufacturing workforce and about 15% of academics are from other EU countries, it added.
Around 1.2 million British nationals live in other EU countries.
A Government spokesman said: "The Prime Minster and other ministers have been absolutely clear that they want to protect the status of EU nationals already living here, and the only circumstances in which that wouldn't be possible is if British citizens' rights in European member states were not protected in return."