A weekend of intense negotiations failed to produce a breakthrough on Brexit and European leaders concluded that it might be difficult for the UK to leave the EU with a deal before the October 31 deadline.
The European Commission said on Sunday that “constructive” talks with the UK had taken place but warned “a lot of work still needed to be done” if a deal was to be reached by Thursday, when the European Council meeting begins in Brussels.
Meanwhile, British Prime Minister Boris Johnson told his Cabinet a last-minute deal was still possible as the two sides pressed on with talks to try to avoid a disorderly Brexit.
MPs return to Parliament on Monday after a speech by the Queen and more talks between the EU and Britain are scheduled.
"The Prime Minister said there was a way forward for a deal that could secure all our interests … but that there is still a significant amount of work to get there and we must remain prepared to leave [without a deal] on October 31," a spokeswoman from Mr Johnson's office said on Sunday.
The prime minister hopes a deal will be agreed to in time for EU leaders to approve it at the summit in Brussels this week.
But Mr Johnson would still have to convince a deeply divided British Parliament to ratify the agreement, probably during a rare Saturday session on October 19.
If he succeeds, the world's fifth largest economy would split from its biggest trading partner with arrangements to minimise disruption at borders and preserve the complex supply chains that underpin the economy.
If he fails, MPs will begin a battle to delay Brexit that could end up being decided in the courts.
Mr Johnson has said he will do his utmost to pull Britain out on October 31, even without a deal — a move he believes would boost his hopes of political survival.
The European Commission said talks would continue on Monday and EU negotiator Michel Barnier would update the 27 member states, except Britain, at a meeting in Luxembourg on Tuesday.
"Differences persist on Customs," an EU diplomat said.
"Small chances remain that a text could be ready for the summit and we won't negotiate at the summit.
"If talks are going well, we might say there is progress but more time is needed to continue."
A delay to the October 31 departure date could still be required, even if a deal were agreed to in coming days, because time would still be needed to fine-tune the deal.
"It's up to the Brits do decide if they will ask for an extension," European Commission head Jean-Claude Juncker told Austrian media outlet Kurier.
"But if Boris Johnson were to ask for extra time, which he probably won't, I would consider it unhistoric to refuse such a request."
Extension options range from as short as an extra month to half a year or longer, and the other EU states would need to agree unanimously to grant it.
If Britain left the EU without a deal, experts say there could be serious short-term disruption with possible food, fuel and medicine shortages, and long-term damage to the UK's reputation as a stable home for foreign investment.
The government says it is doing everything it can to secure a deal, and that it has contingency plans to mitigate the impact of any no-deal exit.
But critics say Mr Johnson is more determined to leave by the deadline to bolster his chances in an imminent general election, even if it meant undermining the will of Parliament and leaving without a deal.
Ireland has been the toughest issue in the Brexit talks, specifically how to prevent the British province of Northern Ireland becoming a back door into the EU's markets without border controls.
The sides fear that controls on the 500-kilometre border with Northern Ireland would undermine the 1998 Good Friday Agreement, which ended three decades of conflict that killed more than 3,600 people.
The Sunday Times reported that Mr Johnson would speak to German Chancellor Angela Merkel, French President Emmanuel Macron and Mr Juncker by the end of Monday.