Ministers are lobbying EU officials to give UK businesses “trusted access” to a scheme that will prioritise investment in sovereign technology to reduce the Continent’s reliance on America.

Without access to the scheme, British companies risk being shut out from AI contacts worth tens of billions of euros.

The talks come as the Prime Minister prepares to attend a EU summit next month where he will push for “deeper cooperation” with the bloc.

Mr Burnham has raised concerns that Brussels’ plans to encourage more European manufacturing in areas from carmaking to computer systems will damage British industry.

The EU’s upcoming Cloud and AI Development Act will require governments in the single market to prioritise European firms when buying AI technology, including data centres and chatbot subscriptions.

This stems from growing concern on the Continent that EU members are becoming American “vassal states” when it comes to technology, with Europe producing few AI heavyweights of its own.

The new rules will prioritise companies that are deemed to be European. That will be based on measures such as their headquarters but also how many of their board members, investors, staff and offices are based overseas.

Industry body techUK has warned that the rules risk shutting British firms out of a European tech market worth €47bn (£40bn).

“The end result would be to weaken collective European resilience and competitiveness, with UK capabilities, research, and innovation frozen out of critical digital infrastructures,” it said in a report last month.

Britain is hoping to obtain privileged access to the scheme. The topic is understood to be part of discussions on the bloc’s “Made in Europe” rules, being led by Jonathan Reynolds, the Business Secretary.

The Department of Business, Innovation, Science and Trade recently held a roundtable on the issue with UK companies concerned at losing access to the market.

UK officials have also held talks over the legislation with MEP Dóra Dávid, according to transparency records.

“The problem [with the plan] is that there is no public definition of trusted partners so the current draft treats the UK like China, like the US, like Vietnam or Russia,” said Alexandru Voicu, of British AI company Synthesia.

“It doesn’t differentiate between countries that are aligned with European regulation like the UK and those diametrically opposed.

“It’s drafted by EU lawyers for EU lawyers instead of the real world.”

European companies have also raised concerns about the regulation, saying it will punish companies who grow by attracting overseas investment.

A deal before the legislation comes into force, expected in early 2028, would be seen as more evidence of the UK and EU coming closer together under Mr Burnham, who has said it is his “duty” to seek stronger ties with the single market.

The talks on Made in Europe could put pressure on the UK Government to raise tariffs on Chinese EV imports. France and Germany have already said this is required if Britain is to continue selling cars to the EU.

Anas Sarwar, the trade minister, said last week that Britain and the EU must “work together and act in lockstep” to combat the flood of Chinese imports of EVs.

Mr Burnham’s push for closer alignment with the EU on AI comes after The Telegraph revealed that Microsoft has pulled out of an Essex data centre deal with Britain’s Nscale.

It marks a significant setback for Nscale, which is one of the UK’s most promising AI startups.

The health of Britain’s AI industry has been subject to heightened scrutiny over the six months, pitting the need for data centres against net zero.

The Telegraph revealed on Sunday that Ed Miliband, the Foreign Secretary, has been accused of blocking AI investment because it does not align with Labour’s green energy plans.

The Government was contacted for comment.

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