British and EU negotiators on Sunday made a breakthrough on the issue of European fleets fishing in UK waters, after they resumed last-minute trade talks to try to resolve differences that threaten to derail a post-Brexit deal.
The UK's chief negotiator David Frost headed to Brussels on Sunday amid warnings that failure to strike a deal would leave Britain in an “economic war” with the 27-nation bloc and the US.
"We are going to see what happens," Mr Frost said when he arrived.
Officials said the next 48 hours would be crucial after UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen spoke by phone on Saturday afternoon and agreed to restart the deadlocked talks.
The discussions broke down the previous day with the British side accusing the EU team of putting new demands on the table at the last minute.
However, citing EU sources, The Guardian reported that on Sunday evening, the two sides had all but finalised terms on the level of access for EU boats to seas within the UK's 200-mile exclusive economic zone. But other challenges still remained, on issues including the "level playing field".
Mr Johnson and Ms von der Leyen agreed to talk again on Monday night after acknowledging that “significant differences” remained. The two leaders will then decide whether negotiations will continue on Tuesday or whether they will walk away from the talks, meaning that Britain will crash out of the EU without a trade deal.
The two sides had sought to reach an accord by October 15 but the negotiations are going right to the wire.
The UK is due to leave the European single market and Customs union at the end of this month.
With Britain and EU both needing time to obtain parliamentary approval for any deal, it must be reached weeks before that date so everything is ready.
Talks are “in a very difficult position”, UK Environment Secretary George Eustice told Sky News.
“We will continue to work on these negotiations until there is no point doing so any further, but there is no point denying that what happened late last week was a setback,” Mr Eustice said
Officials on both sides said this week was realistically the last chance for a deal.
Mr Johnson has the backing of his Cabinet if he opts to walk away, The Sunday Times reported.
Thirteen ministers, including eight who opposed Brexit, will support a no-deal if Mr Johnson thinks it is necessary, the paper said.
Former British leader Gordon Brown said the failure to agree on a deal would leave Mr Johnson the “most isolated prime minister in peacetime history”, with no friends around the world.
“We would be in an economic war with Europe that would cost us dearly,” the anti-Brexit Mr Brown told Sky News.
“We would also be in an economic war with America because there would be no chance of a trade treaty.”
The EU has said it will never be the one to walk away from the negotiations, it regards Thursday’s summit of the bloc’s 27 leaders, where they would be asked to approve any deal, as a natural end point.
Negotiators are striving to reach a deal on Monday or Tuesday at the latest, one official said.
“Significant differences remain on three critical issues,” Mr Johnson and Ms von der Leyen said in a joint statement after their call, which lasted about an hour.
These are the level playing field for businesses and fisheries, and the governance of any agreement. They are disagreements that have dogged the talks since they started in March.
“Both sides underlined that no agreement is feasible if these issues are not resolved,” the leaders said.
Without an accord, businesses and consumers will be left facing the cost and disruption of tariffs and quotas, while relations between the UK and EU could be sour for a generation.
Irish Foreign Minister Simon Coveney struck a more positive note, saying a trade deal was highly likely because it was in everyone’s interests.
