Boris Johnson and Ursula von der Leyen were hoping for a Brexit life support trade deal tonight, though government sources warned the talks collapse was now the most likely outcome.
The Prime Minister and the EU Commission head took stock of the intensive negotiations in a 40-minute appeal and agreed to meet in person in Brussels "in the coming days".
In a joint statement, they said: “We agreed that the conditions for the conclusion of an agreement are not in place due to the remaining significant differences on three critical issues: a level playing field, governance and fisheries.
"We asked our negotiators and their teams to draw up an outline of the remaining differences to be discussed at a physical meeting in Brussels over the coming days."
The meeting is expected to take place before an EU summit, which will take place later this week – most likely on Wednesday.
It is an extremely dramatic moment for Mr Johnson where the showdown may determine the future of Britain for decades. Brexiteers immediately claimed it was laying the groundwork so that it could get the credit for a shock deal.
However, a senior UK government source gave a grim picture of the outlook for tonight, saying there has been "no tangible progress" and there is now "every chance" that no deal will be reached.
"Talks are now in the same position as they were on Friday," the source said.
& # 39; We haven't made any concrete progress. It is clear that this must now be continued politically.
"While we do not consider this process complete, things are looking very difficult and there is every chance we will not get there."
Earlier, Mr Johnson had tried to clear the air in the increasingly bitter talks by stating that the legislation that is effectively tearing up key parts of the readmission agreement regarding Northern Ireland can be watered down.
Although the dispute over the clauses in the Single Market Act is strictly separated from the ongoing trade talks, the EU threatens to poison relations, the EU says the measures violate international law.
The concession came after a hectic 24-hour argument between EU envoy Michel Barnier and David Frost that failed to break through on the three critical sticking points – fishing rights, level playing field and enforcement.
Mr Barnier went on a negative note when briefing the EU ambassadors this morning, suggesting that Wednesday is the absolute deadline for drawing up a workable package. Lord Frost simply said he was working "very hard" when he came to the latest discussions in Brussels.
Rumors of a new compromise on fisheries have been flatly rejected by the UK and although Angela Merkel and Emmanuel Macron allegedly weakened the level playing field requirements as a "final offer", the stalemate remains.
Irish Foreign Minister Simon Coveney said negotiations "stalled" while Dublin Commissioner Mairead McGuinness said it was "not looking good" because Britain "did not understand the need for a compromise".
However, Tory MPs have warned the prime minister that he can no longer give a reason. They said the EU was in a "hell of chaos" and predicted that France will be forced to climb down.
Despite the amendment to the Single Market Act due back in the House of Commons tonight, Mr Johnson sent a less subtle message to Mr Macron today by posing at a fishmonger in his constituency.
Brussels has accused the UK of changing the definition of UK registered fishing boats too late and insisted that their economic activity must take place mainly in the UK. This could potentially further restrict access for European fishing fleets, which are sometimes British registered but mostly operate elsewhere.
Downing Street insisted this afternoon that there will be no trade talks in 2021 if that round collapses – to close down claims by some Brussels residents that Britain will crawl back to the table.
Boris Johnson had a 40-minute call tonight to EU Commission President Ursula von der Leyen as they tried to find a way through the Brexit impasse

The Prime Minister and the EU Commission head (pictured) have agreed to meet in person in Brussels "in the coming days" – most likely on Wednesday before a summit of the bloc's leaders


Negotiations between Lord Frost (right) and his EU counterpart Michel Barnier (left) resumed this morning after no progress had been made the previous day

The statement issued by the heads of state and government warned that "the conditions for an agreement do not exist" because "differences persist on critical issues".
Before the crunch talks with Ms. von der Leyen, the Prime Minister's spokesman warned that time was "very short" but promised to negotiate "as long as we have time".
Ministers had vowed to press ahead with the restoration of the controversial clauses of the Single Market Act tonight after being stripped by the Lords.
After cabinet minister Michael Gove stormed Brussels, the government issued a statement that the joint EU-UK committee that finalized the interpretation of the divorce agreement had made “progress”.
Mr Gove met his counterpart Maros Sefcovic to smooth the series.
"Discussions are continuing and final decisions are expected in the coming days," the government statement said.
“If the solutions considered in these discussions are agreed, the UK Government would be ready to remove Clause 44 of the UK Internal Market Act on Export Declarations.
“The UK Government would also be willing to deactivate State aid clauses 45 and 47 so that they can only be used if they are compatible with the UK's rights and obligations under international law.
“We have continued to make good progress in deciding which goods are at risk from the EU market. The talks will continue this afternoon.
The government also promised to further review the contents of the tax bill, which contains similar provisions and is expected in parliament later this week.
The high stakes in the negotiations were underscored with the recent iteration of the Cabinet Office's no-deal planning document from September, warning of a number of risks.
These include drug shortages, fuel shortages, rising food prices, public disorder and an increased risk of terrorism, clashes with EU trawlers, and border disputes and tariffs.
The memo shows that some cabinet ministers remain nervous about the impact the disagreement is having on the UK as it grapples with the economic devastation caused during the pandemic. A source said, "The possibility of chaos at the border is vastly undervalued if talks collapse."
Faced with increasing cross-channel friction, British diplomats pointed fingers at the Dutch claiming that an agreement on fisheries had indeed been reached.
"They did it before the issue was even addressed," a source told MailOnline. "I suppose with the intention of suggesting that things came close to being settled – which they are not."
There is speculation that the Dutch wanted to ease compromise pressure in other areas by suggesting that fisheries be regulated.
Notoriously vowing to make Brexit "do or die", Mr Johnson has insisted he will not sign an agreement binding Britain to future Brussels laws.
Cabinet ministers gathered behind Mr Johnson yesterday and insisted that he wasn't afraid to get out of the EU single market and customs union without an agreement being reached by January 1st.
British officials were baffled by a tightening of the EU's negotiating stance last week and have come out against Mr Macron for threatening to veto an agreement that runs counter to French interests.
He also wants any post-Brexit deal to include the power to collect tariffs if the UK fails to adhere to EU rules on issues such as employment rights and the environment.
According to The Times, Ms. Merkel and Mr. Macron have teamed up to come up with a “conciliatory” final offer that will water down calls for so-called “a level playing field” on certain issues between the UK and the EU.
But it is said to have been delivered along with a warning from Mr Macron that he is on the verge of breaking off talks so that France cannot prepare for a deal.
Lord Frost resumed talks with Mr Barnier in Brussels this morning after traveling to the Belgian capital yesterday to obtain what the government has dubbed 'the last die roll'.
A source had claimed Mr Johnson was ready to leave tonight unless the EU resigned, adding: “It is fair to say the Prime Minister is not bluffing. It is pretty clear that if the EU cannot accept that we will be an independent nation, we will be leaving on no deal terms.
“There will be no agreement if the EU does not recognize this reality. We will only keep talking when there is some movement and when we think there is any purpose. & # 39;
An ally of the prime minister said he was "optimistic" about the UK's prospects outside the EU, with or without a trade deal.
A high-ranking figure from Downing Street said yesterday that the odds of a deal are "50:50 at best." Another insider put the number at just 30 percent.
Mr Coveney told reporters that Mr Barnier made a "very grim, dejected" assessment in his briefing to the ambassadors this morning.
"Really no progress was made yesterday so we have to try to break through sometime today," said the Irish minister.
Paymaster General Penny Mordaunt answered an urgent question in the House of Commons this afternoon, saying a level playing field was the "toughest" issue preventing the UK and EU from reaching a trade deal.
& # 39; Intensive discussions continue. Indeed, the UK negotiating team, led by Lord Frost, has been in talks with the EU almost every day since October 22nd, working tirelessly to reach an agreement on our future relationship, "she said.
“Indeed, this opportunity also gives us the opportunity in this place to show our collective determination to get a good deal, and our expectations of what that must be and what we will not accept.
“While some progress has been made in many areas, there are known differences in terms of the level playing field, fisheries and governance.
"Of these, the level playing field problem is currently the most difficult."
Senior Tories rushed to urge the government to hold on.
Former Leader Iain Duncan Smith told the House, “While this is referred to as a trade discussion or deal, it is ultimately about … essentially sovereignty, continued control over our laws and territorial waters and, by the way, of our trade .
"So she would give that message back to our negotiators and say that this side of the house is completely behind you."
Ms. Mordaunt replied: “It was a difficulty for the EU to come to terms with the fact that we are an equal sovereign in these negotiations.
"We have raised this point over and over … but that is the crux of the matter and I hope the EU negotiators and all Member States have heard the message from (Sir Iain) very loud and clear."
Former International Trade Secretary Liam Fox said: “We all want a deal, but the difficulties aren't really about trade … it's about EU politics.
"The point is to make sure that no country follows the UK in exercising its legal powers to leave the European Union and that some in the EU have a desire to limit the UK's post-Brexit competitive potential."
Former Brexit Secretary David Davis tweeted: “During the Brexit negotiations, Britain has tried to maintain a civilized approach. Unfortunately, that does not apply to the European Union.
"As negotiations continue today, we have to remember that with a No Deal Brexit, Britain has nothing to fear."
In a round of interviews this morning, Secretary of State James Cleverly said the possibility of a no-deal Brexit should not be seen as 'Armageddon' and urged the EU to show more flexibility.
"Countries can trade perfectly without a formal trade agreement, as Australia does with the EU," the foreign minister told LBC.
“There have been people who have tried to call the idea that we are going without a trade deal a kind of Armageddon.
“It is less preferable than a trade deal, but … you can trade successfully with the EU without a formal trade deal.
"If we have to do that, we have to do it, but we are in a position to do something better if the EU shows a little flexibility and adaptability in these final hours or days of negotiations."
Mr Cleverly was more optimistic, saying the pressure of an upcoming deadline "tends to focus the heads of negotiators on both sides of the table" in order to "get things over the line".
He also claimed that Britain "holds all cards" in the Brexit process.
"Outside of the EU, we can actually sign trade deals with more countries faster than before, so we actually have all the cards in hand," he said.
"I think if the EU recognizes this they will see that there are indeed some small but significant concessions that can be made to achieve this, and that will be in their interests and in ours."

Boris Johnson (right) sent a less subtle message to Emmanuel Macron today by mocking himself with Tory mayoral candidate Shaun Bailey (left) at a fishmonger in his constituency.

A 34-page dossier entitled “Reasonable Worst Case” sets out what No10 could do in the event that the UK leaves the EU in the New Year without a trade deal in place


British negotiators were stunned by a tightening of the EU position at the behest of French President Emmanuel Macron, who said he would veto any deal that threatened French interests. Cabinet Minister Michael Gove was in Brussels today to meet his UK-EU counterpart Maros Sefcovic as they tried to defuse the related dispute over the Single Market Act

Boris Johnson (pictured left while visiting the Uxbridge Police Station with Tory mayoral candidate Shaun Bailey, right) spoke to Ms. von der Leyen on the phone tonight

The Single Market Act contained extraordinary provisions which specifically stated that EU law and the Take Back Agreement should be ignored if ministers say so
Mr Barnier had warned that the implementation of the controversial clauses in the Internal Market Act would plunge the talks into a crisis.
Downing Street claims the measures are needed to prevent the EU from driving a No Deal wedge between Northern Ireland and the rest of the UK.
A # 10 source confirmed that the protracted negotiations "are within the last 48 hours".
Cabinet ministers yesterday backed the Prime Minister pursuing No Deal in case talks collapsed, saying he had a mandate to ensure Britain regains control of its laws. However, many remain concerned about the impact of no deal on a fragile economy.
A leaked official document setting out the government's "reasonable worst-case scenario" for no deal warned that the supply of essentials, including medicines, could be seriously disrupted.
Environment Secretary George Eustice admitted that No Deal tariffs would lead to higher food prices but insisted the increase would be modest.
In a series of interviews yesterday, he accused the EU of "introducing a whole bunch of additional demands" late in the day, adding: "There is no point in denying that what happened late last week was a setback. "
He described the EU's demands on fisheries as "ridiculous" and said they would mock the UK's newfound status as an independent coastal state.
He said the Prime Minister is ready to give assurances that the UK will not lower standards on environmental protection and employment rights.
However, he said Mr Johnson would never sign a contract in line with Mr Macron's call for the UK to continue to comply with EU rules.
Eurosceptic MPs yesterday put pressure on the Prime Minister not to let up.
Former Brexit Minister David Jones, who is a member of MPs European Research Group, tweeted: "Absolute confidence in David Frost and the UK negotiating team to stand firm in pursuing a fair free trade deal that respects UK sovereignty. We don't have to settle for anything less. & # 39;
Tory Andrew Bridgen has said the Prime Minister would be "done" if he signed a treaty that did not guarantee independence.
Former Treasury Secretary Nick Macpherson said the breakdown with France had the characteristics of a made-up range that often preceded an agreement.
& # 39; Britain needs a deal. The EU wants a deal, ”added Lord Macpherson. “To win over your constituencies, there has to be a lot of drama in the coming days.
& # 39; But there will be. There is always – unless one of the parties makes a gross miscalculation. & # 39;
EU leaders will hold a summit on Thursday, seen as the last chance to sign an agreement.

President Macron admitted that Angela Merkel from Germany (pictured) is pushing for an agreement
EU is at war for no deal Brexit: while Emmanuel Macron is playing hardball, Ireland warns of a "very, very costly" failure to sign a trade deal … and even Angela Merkel is not on board
Emmanuel Macron is under pressure from EU leaders to withdraw from Brexit.
British officials claim the French president derailed progress last week by forcing EU negotiator Michel Barnier to tighten his stance at the last minute.
But over time, European leaders warned that it was important to get a trade deal.

Emmanuel Macron is being pressured by EU leaders to step back on Brexit as talks continue

Angela Merkel does not endorse France's tough stance on state aid, workers' rights and environmental standards
Ireland's Prime Minister Micheal Martin said he felt an agreement would be reached because the alternative would "harm everyone involved".
The country's foreign minister, Simon Coveney, said any other outcome was "pointless" for both sides.
Mr Coveney, whose country is having the worst impact of No Deal, said failure was "very, very costly and very, very disruptive".
He added: “In the context of a post-Covid world, which is an enormous economic challenge for everyone, this makes no political sense and certainly also no economic or social sense.
"For all of these reasons, I think the negotiating teams and senior politicians will find a way to get a deal here, but right now we are in a difficult place as we are trying to close it."

Ireland's Prime Minister Michael Martin said he felt an agreement would be reached because the alternative would "harm everyone involved".
The French minister for Europe admitted yesterday that some other EU leaders – including Germany's Angela Merkel – did not support France's tough stance on state aid, workers' rights and environmental standards.
In an interview with the Journal du Dimanche, Clement Beaune said: “There are different sensitivities in the 27 EU countries. It would be naive to deny it. However, the negotiating mandate is detailed and we are sticking to it.
“Chancellor Merkel wants a deal, but she also defends our demands – and she knows the European market well enough to guess how the German economy would suffer from a bad deal. In short, the UK gamble to divide the EU has failed. & # 39;
On Friday, Mr Beaune warned that President Macron was ready to veto an agreement if it failed to meet French demands.
But yesterday he said France was ready to consider allowing Britain to deviate freely from EU standards – provided Brussels could take "corrective action" if the differences became too great.
"The British want access to the European internal market without restrictions on their social, environmental or health standards, which is unacceptable," he said. “For our part, we are ready to introduce a system in which a deviation from the standards would be allowed, but beyond which corrective action would be taken.
"The British tell us that this is unfair because other 'third countries' do not have the same restrictions as Canada. However, we must be aware that tomorrow the UK will be our main trading partner outside the EU. Between the EU and Great Britain has ten times as much trade as Canada. & # 39;
France has support from other coastal states such as the Netherlands and Belgium, which are also concerned about their domestic fishing industries.
However, other member states, led by Germany, are keen to avoid a destabilizing no-deal outcome when the continent is already facing a double recession as a result of the pandemic.
In another sign of EU tension, the Netherlands proposed last night to compromise on fishing rights.
However, government sources said the Prime Minister will not accept Mr Macron's demands for a level playing field, where he urges Brussels to have the power to impose immediate tariffs if the UK is too far removed from EU rules in the future .
Gavin Barwell, who was Chief of Staff on Downing Street during Theresa May's tenure, said: “Some in the EU believe that Britain will be forced to return to the negotiating table.
"But there is a real risk that if we don't get a deal now, we will have significant damage to the relationship that will take time to correct."
Mr Barnier will brief the EU ambassadors this morning after trade talks resumed last night.

Union leader Len McCluskey says Sir Keir Starmer cannot avoid an important Brexit vote if an agreement is reached
By Claire Ellicott Political Correspondent for the Daily Mail
Sir Keir Starmer was pressured yesterday evening by Labor's largest union promoter to back a Brexit deal if an agreement is reached.
Unite boss Len McCluskey warned him not to sit on the fence – but Labor Frontbenchers stuck to the party line yesterday and refused to rule out an abstention on a future vote on a Brexit deal.
Sir Keir has a difficult job in uniting the hard core of his party of Remainers with the heartland of the Labor Party in the north, which supported Brexit and joined the Tories in the last election.

Unite boss Len McCluskey warned Sir Keir Starmer not to sit on the fence about the upcoming Brexit vote

Sir Keir has a difficult job connecting the hard core of his party, Remainer, with the heartland of the Labor Party in the north
Mr McCluskey said yesterday that it would be "totally wrong" for Labor not to vote one way or another, as Brexit was "the main issue of the day".
Football expert Gary Neville also stepped in, accusing the party of sitting in the stands by abstaining from the tier system last week.
Mr McCluskey said Sir Keir must "win the trust of the Red Wall seats" moving to the Tories to the north.
He said the Labor leader should not be seen as "standing in the way" as the Red Wall voted for, but should speak out against any deal that is not good enough.
"On the other hand, if it's a thin deal – which I suspect, if we actually get a deal – it has to be able to attack the government without them in six months, too, if something goes wrong." To be viewed hypocritically for voting for the deal, ”McCluskey told Times Radio. When asked about the Labor vote for a deal, Mr McCluskey replied, “Yes, in my opinion we want to complete Brexit and get it out of the way. It won't stop us from being critical when the deal actually creates all sorts of problems and problems for us to move forward. & # 39;
Sir Keir's position is to wait and see what Boris Johnson's Brexit deal negotiates – an attitude his front benchers repeated yesterday when they refused to exclude an abstention from a vote.
Shadow Cabinet Minister Rachel Reeves said "Let's see" when asked if Labor would support a future Brexit deal.
Nick Thomas-Symonds, shadow home secretary, said it was "responsible" for the party to ponder an agreed deal.
(tagsToTranslate) Dailymail (t) Nachrichten (t) Angela Merkel (t) Boris Johnson (t) Brexit (t) Emmanuel Macron
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