A government source has confirmed to the BBC that Britain “will be leaving on WTO terms on 31 December” unless British negotiators see a “substantial shift” from the European Commission in the coming days.
The talks, which remain ongoing with less than two weeks left on the transition period, have stalled over a range of issues that remain intractable.
On Sunday night, the EU’s chief negotiator Michel Barnier warned that talks were at a “crucial moment” and insisted that “both the EU and UK must have the right to set their own laws & control their own waters.”
The tone is very similar to that of Downing Street, with a source saying that “we cannot accept a deal that doesn’t leave us in control of our own laws or waters.”
But while Downing Street’s position appears consistent, Barnier’s public comments conflict with warnings he made to EU ambassadors. Earlier this week he demanded that a Brexit deal could only be achieved with a “compromise” on fisheries, rather than simple control of territorial waters.
And the mood of the comments, which stressed that European officials “respect the sovereignty of the UK,” does not mesh easily with the increasingly hostile backdrop to talks.
Writing on Twitter yesterday, the prominent Eurosceptic Conservative MP John Redwood declared that “the EU has made clear they do not want a fair free trade agreement. They want to control our laws, stop us backing our business, and take our fish. Time for an independent UK.”
And while back benchers sound familiar themes, even senior ministers are now speaking openly about the difficulty posed by the EU’s position, with the Health Secretary Matt Hancock saying: “I hope the EU moves on its unreasonable demands, that I don’t think anybody could reasonably accept, and then we can get a trade deal.”
With a “deal or no deal” decision expected before Christmas, it appears that both sides have a very limited window to resolve their differences and end the year with a free trade agreement.