Video report by ITV News Political Editor Robert Peston
The Prime Minister Boris Johnson has told ITV News there will be "substantial sums" for the UK to spend on "our priorities" in the event of a no-deal Brexit.
Speaking at the G7 summit - an informal club of rich nations that meets annually to discuss major issues - Mr Johnson said the £39 billion divorce bill would "strictly speaking" no longer be due to the EU.
He refused to be drawn on the exact figures available should the country crash out without a deal, but insisted it would be to the UK's benefit.
"If we come out without an agreement it is certainly true that the £39 billion is no longer strictly speaking owed," he said.
"I'm not going to get into the figures, but there will very substantial sums available to our country to spend on our priorities, to spend on getting on getting our businesses ready.
"It's not a threat, it's a simple statement of reality, that's the way things are."
Mr Johnson has been using the summit in Biarritz to hold talks with European Council President Donald Tusk, who earlier warned him not to go down in history as "Mr No Deal".
ITV News Political Editor Robert Peston reports from Biarritz where he says that a no-deal Brexit is looking more likely than ever, with only British MPs standing in the way of this. He predicts the "mother of all Parliamentary crises" when politicians return from their summer recess in September.
Mr Johnson also claimed the EU had accepted the UK's stance on removing the Irish backstop from the Withdrawal Agreement and were willing to reopen negotiations.
Since Mr Johnson's appointment as Conservative Party leader in July, there has been a stand-off between No 10 and the EU, with both sides seemingly unwilling to try and reach a new compromise, making the prospect of a no-deal Brexit increasingly likely.
But on Sunday, Mr Johnson told ITV News' Political Editor Robert Peston in Biarritz that there was a more conciliatory spirit from the bloc.
"I hope you'll agree that in the last few days there has been change in mood I think, in the EU," he said.
"They recognise that we're willing to talk about progress that can be made. Of course, they say it's impossible, they say that they can't get rid of the backstop.
"The point that we're making to them is that unless they get rid of that system that keeps the UK locked in to the regulatory orbit, the trading system of the EU with no say in those things for the UK. Unless they get rid of that there's no way, we can do a deal. And I think that point has landed."
After speaking to Robert Peston, Mr Johnson met with Mr Tusk and said the pair discussed Brexit and foreign policy issues.
Downing Street added that the Prime Minister had told the European Council President: "We will work in an energetic and determined way to get a better deal and we are very willing to sit down to talk with the EU and member states about what needs to be done to achieve that".
But an EU official said the meeting had mainly restated known positions and Brussels had been hoping for "new elements to unblock the situation".
Speaking to Robert Peston ahead of the meeting, Mr Johnson had said it "would be sensible" for negotiations with the EU to "get going now" and used his morning swim in the Atlantic as an example of how things could be done.
"Let me give you a metaphor. I swam round that rock this morning. Now, from here you cannot tell that there is a gigantic hole in that rock, there is a way through. My point to the EU, there's a way through but you can't find the way through if you just sit on the beach. That would be my message. So, let's get going'."
After his morning dip, Mr Johnson had also met with US President Donald Trump for a breakfast meeting where a post-Brexit trade deal was among the topics discussed.
Mr Johnson reiterated his point that a trade deal with the US would not be "plain sailing" but said there was an "opportunity to do a great free trade deal with the United States" something he said President Trump was "very gung-ho about".
He also stressed "NHS in no way can be part of the negotiations".
"There are real issues for UK business and manufactures of all kinds because of the barriers they face in the US. I don't think people realise quite how protectionist sometimes the US market can be.
"So, what I'm saying to Donald, to President Trump, this is a big opportunity for both of us,but we need to see some movement and we need to see movement from the US side as well."
As the October 31 deadline looms ever nearer with no new negotiations officially scheduled, preparations for a no-deal Brexit have been ramped up, but Mr Johnson insisted the country would be ready if the UK left the EU without a deal.
"Of course, on no-deal you're right that we have to prepare for it, and we have to work very hard, as we are, to minimise any possible economic consequences and as I said on the steps of Downing Street there will be bumps on the road.
"With every day that goes by, with all the preparation that we're making, we think that we're minimising those risks."
As well as the G7 members of Canada, France, Germany, Italy, Japan, the UK, the US, and the leaders of the EU, France, as the host, invited India, Chile, South Africa and Australia as important regional democracies, plus four African nations: Burkina Faso, Egypt, Senegal, and Rwanda.
On Sunday, a senior French official said the country's President Emmanuel Macron had also invited Iran's foreign minister in a bid to ease tensions over its nuclear program.
The official said the decision to invite Jawad Zarif came after the G7 leaders gathered for dinner Saturday night.
Asked whether the White House was aware of the visit, the French official said "we operate on our own terms" but noted that Mr Macron and Mr Trump met for two hours on Saturday and discussed Iran at length, as well as at the group dinner.
They continued that the Americans in Biarritz will not meet with Mr Zarif, and that France "is working in full transparency with the US and in full transparency with European partners".
Away from the topic of the G7, Mr Johnson would not be drawn by Peston on whether he had confidence in Prince Andrew following media reports about his friendship with the US financier Jeffrey Epstein who killed himself in prison two weeks ago, but commended the Duke of York's "hard" work "selling the UK overseas".
"Let me tell you something, I've worked with Prince Andrew, I've seen the good he's been able to do for UK business overseas. And other than that I have absolutely no knowledge of these matters and no comment to make," Mr Johnson said.
Watch the full interview:
The Prime Minister's comments came as he faced a backlash over reports he had sought legal advice from Attorney General Geoffrey Cox about temporarily shutting down Parliament - known as prorogation - for five weeks from September 9.
The Observer reported that the move would allow for a Queen's Speech, starting a new parliamentary session, on October 14.
Such a move would keep MPs away from the Commons until shortly before the European Council summit of EU leaders on October 17, potentially preventing moves to block a no-deal Brexit.
A Government source said the claim was "entirely false".