Britain and the European Union are heading towards a trade deal that will satisfy Brexit supporters, it has been reported.
"Big buzz in the last hour among Tory MPs that the UK is heading towards a Brexit deal with the EU. Eurosceptics being reassured they will be happy," BBC Newsnight's Political Editor Nicholas Watt wrote on Twitter on Tuesday.
MPs are on stand-by for an extended House of Commons sitting to ratify a Brexit deal in Parliament next week, if an agreement is reached by the weekend.
However, the two sides say that negotiations are still stuck in several areas, including fisheries, a level playing field and how an agreement will be policed. And both Downing Street and Brussels have warned that no-deal - forcing the UK to trade with the bloc on WTO terms - is still the most likely outcome.
But EU sources told The Guardian that London was prepared to make a concession on post-Brexit fishing rights as part of a broader compromise to clinch an agreement. Sources said that Britain had dropped a demand for fishing vessels operating under the UK flag to be mainly UK-owned under the new terms.
Irish Prime Minister Micheál Martin said earlier that he hoped there would be some clarity on a Brexit deal by the weekend and that he was more optimistic than a week ago about the two sides reaching an agreement.
"I would like hopefully by the weekend that we would have clarity around this and certainly it's important that we do get some clarity so that we can then get any deal that might come over the line ratified," Mr Martin told Ireland's Virgin Media News.
"I think it's very important that we get a deal," he added.
Germany's ambassador to the EU also said there was a chance of a deal by the weekend.
Jacob Rees-Mogg, the Conservative MP responsible for the timing of the House of Commons voting through a post-Brexit trade deal, said that lawmakers could be asked to approve a trade deal retrospectively.
However, UK Prime Minister Boris Johnson's spokesperson was quick to dismiss Mr Rees-Mogg's comments.
“We’re confident that all of the necessary domestic UK legislation required for 1 January will be in force by the end of the transition period," the spokesperson said.
British mid-cap stocks gained ground in the final hour of trading on Tuesday, as renewed hopes of a Brexit trade agreement overshadowed concerns over a weak labour market report and new coronavirus restrictions in London.
The FTSE 250 index recovered from early losses to end around 0.5 per cent higher as the BBC journalist tweeted Britain and the European Union are heading towards a trade deal.
A sharp rise in the sterling helped the blue-chip FTSE 100 index pare its losses to about 0.3 per cent with consumer staples weighing the most.