French President Emmanuel Macron has warned Boris Johnson that Britain's economy will be downgraded and plunged into turmoil if Britain withholds a £39 billion ($74.7b) Brexit divorce payment from Brussels.
In his first interview of the Tory leadership campaign, Johnson, a former Foreign Secretary, said he would "retain" the bill until he achieved a better deal with the EU.
He claimed that withholding the money would be a "great lubricant" to persuade European nations to reopen talks on the Irish backstop and the terms of a future trade deal.
However, a source close to Macron said failure to pay the divorce bill would be equal to a "sovereign debt default", such as that suffered by Argentina.
It would lead to a significant downgrade in the British economy by ratings agencies, causing the value of government bonds to collapse, hitting savers and investors, including insurance companies and pension funds.
The source said: "Not honouring your payment obligations is a failure of international commitments equivalent to a sovereign debt default, whose consequences are well known."
There was similar concern about Johnson's comments in Brussels, where senior figures warned that defaulting on Britain's divorce bill would be unacceptable.
Guy Verhofstadt, the European Parliament's chief Brexit negotiator, said: "This would not only hurt the UK's credibility as an international partner but it is absolutely unacceptable and contradicts what almost every lawyer in the UK thinks about it."
Johnson argued that the divorce bill would prove to be a "great solvent". He said: "Our friends and partners need to understand that the money is going to be retained until such time as we have greater clarity about the way forward.
"I always thought that it was extraordinary that we should agree to write that entire cheque before having a final deal.