The two countries have tabled a blueprint that would create four new tiers, with the most aligned states forming an “inner circle”.
In what will be seen as an olive branch, a new outer tier of “associate membership” would be open to the UK, laying the ground for a closer economic relationship.
Senior Tories welcomed the proposal with the former deputy prime minister Michael Heseltine telling The Independent that Britain must urgently explore the idea as the “overarching majority of people in Britain see Brexit as a mistake”.
“The dam is breaking and there is increasingly a move towards integrating with Europe,” he said.
But the move prompted a furious reaction from Brexiteers who accused EU countries of “desperation” in their bid to enlarge the bloc.
News of the plans came after Sir Keir Starmer held talks in Paris with French president Emmanuel Macron, the final leg of an international tour designed to portray the Labour leader as a prime minister in waiting.
But as both main parties walk a tightrope over Brexit in the run-up to next year’s general election, Labour and No 10 ruled out any form of associate membership of the EU.
As he tries to appeal to both pro-remain businesses and Leave voters, Sir Keir at the weekend pledged to secure a “much better” Brexit deal if he wins the next election, but rejected rejoining the customs union or the single market.
In March the chairperson of the government watchdog the Office for Budget Responsibility warned the economic impact of Brexit was the same “magnitude” as the Covid pandemic and the energy price crisis.
Richard Hughes said Britain’s gross domestic product, a key measure of a country’s wealth, would be 4 per cent higher if the UK had stayed in the EU.
Under the associate membership plans the UK would be expected to contribute to the EU’s annual budget and be governed by the European Court of Justice in exchange for “participation” in the single market.
Associate members, who would form the bloc’s first “outer tier”, could include members of the single market who are not in the EU, such as Switzerland, or “even the UK”, a paper put forward by France and Germany stated.
They would not be bound to “ever closer union” and further integration, it said.
But they would have to commit to the “common principles and values” of the EU.
Although they would pay into the EU’s budget, costs would be lower than those paid by full members.
Sir Keir said his meeting with Mr Macron began with an “exchange of gifts” and covered topics including “the relationship between our two countries” and future “prosperity and security”.
Sir Keir stressed plans to “build” on the relationship between France and Britain if Labour wins power.
A European diplomatic source told The Times the plan was designed with Labour in mind, despite Sir Keir having ruled out rejoining the EU’s single market.
“It is carefully balanced politically to be a potential place for Britain without the need to ever rejoin the EU or to hold a referendum,” the source said.
A party spokesperson said: “Labour will seek a better deal for Britain. This does not involve any form of membership.”
And the prime minister’s official spokesperson, asked whether Rishi Sunak would countenance Britain becoming an associate member of the EU, said: “No.”
Associate membership would not include a customs union, allowing Britain to keep an independent trade policy.
Lord Heseltine told The Independent Britain “must urgently explore” France and Germany’s plan.
He said: “The remorseless pressure of public opinion is changing the dynamic of politics.
“The dam is breaking and there is increasingly a move towards integrating with Europe. This is an opportunity offered by France and Germany which should be seized upon.
“The overarching majority of people in Britain see Brexit as a mistake, even those who still believe in it agree it has never been possible to implement it.
“The Tories have at least recognised change is needed, firstly with Northern Ireland and the Windsor Agreement and then with Horizon, allowing cooperation on science and technology.”
He also suggested that political stances could shift after the next election. “While the red wall may be insurmountable on this side of the general election, the pressure of events will push people of both main parties to dare to change and to make permanent links with Europe,” he said.
“This new plan between France and Germany must be explored urgently.”
In response to the plan, the Conservative MP Tobias Ellwood, who has previously called for Britain to rejoin the EU’s single market, said the UK needs a “pragmatic re-engagement with Europe”.
“As our Brexit deal comes up for formal re-negotiation, we need to explore more avenues for economic advantage,” he added.
Sir Jacob Rees-Mogg, when asked about the potential to join a new outer tier of the EU, said: “I like the outer tier that we are currently in.”
Former Brexit minister Lord Frost told The Independent Britain should “certainly not” consider associate membership.
Sir John Redwood, the Tory former trade minister, said that leaving the single market was “a crucial part of the Brexit case” and rejoining would do “huge damage” to British industry. He said a “great win” of Brexit was no longer having to contribute to the bloc’s budget.
Tory MP Craig Mackinlay said the idea “smacks of desperation” at a time when many member states are wondering “what this democracy devouring beast is for”. He said: “The country rejected this once and would do so again.”
Gina Miller, the anti-Brexit campaigner, told The Independent the UK should “see this move as an opportunity to start” the process to rejoin the EU.
“This ‘onion’ option, forming part of an outer layer of the EU, is an olive branch from our European neighbours, but we must negotiate cautiously to make sure that we regain at least some of the influence we lost under Brexiteer extremism,” she said.
And Best for Britain, which campaigns for closer ties with the EU, said the proposals were “encouraging”, although associate membership remains “some way off”.
Under the plans a second tier for outer members would not include any integration with EU law but would see an upgrade of the European Political Community (EPC), of which Britain is a part. It would include free trade agreements in certain areas such as energy or defence, and would focus on cooperation on important issues such as climate and security.
The paper has been written by an official “Franco-German working group on EU institutional reform”, made up of experts, academics and lawyers, set up by both the French and German governments earlier this year. The proposals are due to be presented at a monthly meeting of ministers of EU member states.