European Union chief Ursula von der Leyen and Prime Minister Boris Johnson can agree on one thing: the EU and the UK are heading for a no-deal split.
Mr Johnson chaired a meeting with Cabinet Office Minister Michael Gove, one of his key Brexit advisers, and others on Friday to assess the country's preparedness for leaving the European Union without a trade deal.
Senior officials in charge of Brexit planning also attended, the BBC reported.
Ms von der Leyen told the EU's 27 leaders in Brussels on Friday that the bloc was unlikely to get a trade deal with the UK by Sunday's deadline.
"Situation is difficult. Main obstacles remain," an EU official said of Ms von der Leyen's message to EU leaders.
"The probability of a no deal is higher than of a deal."
Mr Johnson has also put business and the public on notice to prepare to leave the EU without a deal.
Speaking in Blyth in north-east England on Friday, Mr Johnson said a no-deal Brexit was "very, very likely".
He said: "I’ve got to tell you that from where I stand now here in Blyth, it’s looking it’s looking very, very likely that we’ll have to go for a solution that I think would be wonderful for the UK to be able to do exactly what we want from from January the 1st.
"Obviously, it would be different from what we’d set out to achieve. But I’ve no doubt that this country can get ready and as I say, come out on World Trade (Organisation) terms."
The day before Mr Johnson said there was a “strong possibility” the UK would not strike a deal with its largest trading partner.
The warnings came as Irish Prime Minister Michael Martin insisted “97 per cent of the deal had been agreed”.
Mr Martin pleaded with both sides to reach agreement because there are “no winners and losers” in a no-deal situation.
Ireland is the EU member state most at risk from Britain crashing out of the bloc without a deal.
Mr Martin said: "Dialogue is key and both teams have given themselves a deadline of this Sunday, and I think the key to unlocking this is to stand back and look at the overall picture here.
“There can be no winners or losers in these negotiations from now on. There has to be a common purpose in terms of getting a deal over the line because it makes sense to get a trading deal.
However, Mr Johnson said the bloc’s demand that the UK follow future changes in EU rules was a major obstacle.
“There’s now the strong possibility we will have a solution that’s much more like an Australian relationship with the EU than a Canadian relationship with the EU,” Mr Johnson said.
“Looking at where we are, I do think it’s vital that everybody now gets ready for that Australian option.”
Now is the time for the public and businesses to get ready for the Australian option on January 1st. pic.twitter.com/lLJfmIy9XI
— Boris Johnson (@BorisJohnson) December 10, 2020
Shadow Foreign Secretary Lisa Nandy said the opposition Labour party was prepared to support a deal.
She told BBC Radio 4's Today programme: "A deal is better than no deal. It represents a floor not a ceiling of what we can achieve for this country.
“But what we can’t have is a situation where the government is actively doing harm to our businesses and preventing them from thriving and doing well.”
The “Australian option” is Downing Street’s code for no deal.
In that scenario, the UK would fall back on the rules of the World Trade Organisation and face tariffs, as well as quotas, when the transition ends on December 31.
Former Australian premier Malcolm Turnbull told BBC’s Question Time that his country doesn’t have a “satisfactory” trade relationship with the EU.
“Be careful what you wish for: Australia’s relationship with the EU is not one, from a trade point of view, that Britain I think would want,” he said.
“There are very big barriers to Australian exports, agricultural products in particular. There’s a lot of friction in the system in terms of services. So there’s a lot to aim for.”
“Be careful what you wish for. Australia’s relationship with the EU is not one, from a trade point of view, that Britain would want.”
— BBC Question Time (@bbcquestiontime) December 10, 2020
Former Australian Prime Minister @TurnbullMalcolm warns the UK against relying on WTO rules for business with Europe. #bbcqt pic.twitter.com/u3OiLJ7SH8
The pound extended its decline after Johnson’s intervention. His remarks couldn’t come at a more delicate time as EU leaders meet in Brussels after seeing off a threat by Hungary and Poland to block a $2.2 trillion stimulus package.
Earlier on Thursday, the EU published its contingency plans in case trade talks collapse.
The bloc aims to maintain basic air and road links between EU nations and the UK, while also allowing access to each other's fishing waters.
The European Commission said there was "significant uncertainty" about whether a deal would be in place by January 1.
"Our responsibility is to be prepared for all eventualities, including not having a deal in place," Ms von der Leyen said.
Among the contingency measures in place for no deal are:
the provision of "certain air services" between the UK and EU for six months, provided the UK does the same
basic connectivity for road freight and passenger transport for six months, provided the UK does the same
the possibility of reciprocal fishing access for UK and EU vessels in each other's waters for one year, or until an agreement is reached
After Mr Johnson arrived in Brussels on Wednesday evening for a dinner with the head of the EU, Downing Street said there were still "very large gaps" in the talks.
"The PM and VDL agreed to further discussions over the next few days between their negotiating teams," a senior No 10 source said, adding that by Sunday "a firm decision should be taken about the future of the talks".
Ms Von der Leyen tweeted: “We had a lively and interesting discussion on the state of play on outstanding issues. We understand each other’s positions. They remain far apart.
"The teams should immediately reconvene to try to resolve these issues. We will come to a decision by the end of the weekend.”
