Mervyn King argued that the Government had wasted a year and should be much "further along the road" of planning what to do if negotiations with Brussels fail. His words come as early talks with the EU stalled over the issue of citizens' rights and with UK businesses calling on the Government to extend the negotiating period to avoid a chaotic Brexit in March 2019. Theresa May has insisted "no deal is better than a bad deal", indicating the UK would leave the EU and rely on World Trade Organisation rules after Brexit if what is on offer from Brussels proves unacceptable. But crossbench peer Lord King of Lothbury - who led the Bank for a decade until 2013 - said the UK needs to be better prepared for a "no deal" Brexit to show Brussels there is a "credible" alternative should negotiations fail. He told BBC Radio 4's Today programme: "This ought to be something that people ought to be able to agree on, irrespective of whether they are in favour of Brexit or not, because we are where we are, and we are in a negotiation and it's important that the negotiation succeeds. "But it cannot succeed without a credible fallback position and that is something which I think is a practical thing that the civil service ought to be taking a lead on. "It's a do-able proposition if we start now. We've probably wasted a year, but we need to be much further along the road to making that a credible fallback position." He added that failing to agree a deal with Brussels was "not the first preference of anybody", but more work needed to be done if the EU was to be convinced the UK was serious about walking away. Brexit minister Steve Baker has confirmed the Government is preparing for all outcomes of the Brexit talks, including the "unlikely" scenario of failing to strike a deal with Brussels. Divorce discussions are due to restart within weeks but progress so far has been slow with Brussels demanding concessions from Downing Street on the issue of EU citizens' rights in the UK after Brexit. Earlier this week, the Institute of Directors called on the Government to consider extending the two-year Article 50 negotiating period to avoid a chaotic Brexit the country is unprepared for. The body said it is the "simplest solution" to ensure there are no cliff edges for businesses to deal with as the UK moves to new trading arrangements with the European Union.