UPDATE 1-EU to agree further Brexit delay but could kick UK out on June 1 -draft

The European Union will grant Britain another delay to Brexit on certain conditions, including that it hold European Parliament elections, according to draft conclusions of the bloc's national leaders, who are due to decide on the matter on Wednesday. It would cut Britain off on June 1 if it failed to honour that condition.

According to the draft seen by Reuters the EU will agree "an extension to allow for the ratification of the Withdrawal Agreement." It could be cut short if both the EU and Britain ratify the Brexit deal before it runs its course. The EU will demand that Britain's extended stay in the bloc cannot undermine its key institutions.

"If the UK is still a Member of the EU on 23-26 May 2019 and if it has not ratified the Withdrawal Agreement by 22 May 2019, it must hold the elections to the European Parliament in accordance with Union law. If the United Kingdom fails to live up to this obligation, the withdrawal will take place on 1 June 2019," the draft said. "The United Kingdom shall facilitate the achievement of the Union's tasks and refrain from any measure which could jeopardise the attainment of the Union's objectives."

The draft conclusions, however, have for now left the end-date of the Brexit postponement blank before national EU diplomats discuss them later in the evening in Brussels. Several EU diplomats said that the 12-month extension proposed by European Council President Donald Tusk, who will chair the Wednesday summit, was unlikely to fly and several member states have agreed with France that that would be too long.

Instead, they said that the Brexit lag could go until the end of the year but that the 27 national leaders in the bloc would have the final say on Wednesday. (Reporting by Gabriela Baczynska; Editing by Alison Williams and Hugh Lawson)