The Brexit Secretary told The Sunday Times negotiations would be plunged into "crisis" from the start because the EU refused to discuss a trade deal until Britain agreed to pay the "Brexit bill".
Following requests from several member states, EU negotiators revised their initial calculations to increase the liabilities the UK must help pay for, Independent reported.
They include payment of farm subsidies and EU administration fees, which could continue after the UK officially leaves the Union until 2020.
Mr. Davis also said he regarded even "€1bn as a lot of money" as he warned other member states would have to shift their position if they wanted to see progress.
“We don’t need to just look like we can walk away, we need to be able to walk away," he told the paper.
"Under the circumstances, if that was necessary, we would be in a position to do it.”
When asked if he would storm out of the meeting, he said: "Wait and see."
Mr. Davis also rejected a demand for every EU citizen who has lived in the UK to get full rights to live, work and claim benefits.
"How on earth would you manage such an exercise?" He asked.
The Conservative manifesto, launched last Tuesday, confirms Britain could still continue to make payments to the EU after it leaves the bloc.