Britain warned the European Union on yesterday that it will withhold billions of euros (dollars) of a promised divorce payment if there is no Brexit deal.

Brexit Secretary Dominic Raab said the U.K. would pay "significantly, substantially" less than the already agreed-upon 39 billion pounds ($51 billion) in the event no agreement is reached. The payment covers commitments the U.K. has made as a member of the bloc, including pension liabilities for EU staff and programs the U.K. has agreed to help fund over the next few years. Raab told the BBC that Britain would recognize its "strict legal obligations" to the EU but would not make the full payment.

"It's not a threat and it's not an ultimatum, it's a statement of fact," he said. Negotiations over future relations once Britain leaves the EU on March 29 have got bogged down amid divisions within Britain's Conservative government over the extent of the post-Brexit economic relationship with the bloc. Raab said he remains confident the two sides will reach a deal. But the government is also stepping up preparations for leaving without an agreement.