Theresa May is battling to get the Brexit negotiations back on track amid deadlock over the future status of the Irish border.
The Democratic Unionists – who prop up the Government in Parliament – have insisted they will not sign up to a proposal for Northern Ireland to remain in “regulatory alignment” with the Republic once Britain has left the EU.
However the Irish government has warned that unless the UK goes ahead with the plan there could be no question of the Brexit negotiations moving on to the second phase – including trade talks – before the end of the year.
Brexit Secretary David Davis sought to reassure the DUP that retaining common rules with the Republic on issues such as food safety standards and animal welfare would not effectively mean the creation of a new “border in the Irish Sea” between the North and rest of UK.
In the Commons on Tuesday, he pointedly did not rule out the idea that regulations which continued to apply in Northern Ireland could be retained across the whole of the UK.
“Every approach we take will treat the whole of the UK as a single constitutional entity and a single economic entity,” he said.
Brexit Secretary David Davis (PA)
However the move threatened to put him on a collision course with hardline Tory Brexiteers who argue that escaping EU rules and regulations is one of the key benefits of leaving.
Mr Davis stressed “alignment” did not mean full harmonisation with EU regulations, saying it could involve “mutually recognised rules, mutually recognised inspection, all of that sort of thing as well”.
Meanwhile DUP leader Arlene Foster complained that they were only shown the proposed text late on Monday morning, around the time Mrs May was sitting down to lunch in Brussels with European Commission President Jean-Claude Juncker.
The Prime Minister had been hoping to sign-off on the agreement, but was abruptly forced to put the plan on hold following a telephone call with Mrs Foster.
“We realised that in no way could we sign up to that text because essentially it was making a red line down the Irish Sea,” the DUP leader told Sky News.
Earlier, Downing Street said the Prime Minister was expected to speak to Mrs Foster on Tuesday in an attempt to resolve their differences but – in a possible sign of how intractable the issue has become – the call did not take place. It is not clear when they will next talk.
Mrs May insisted the talks in Brussels had made “good progress” and that she would be returning to the Belgian capital later in the week with a view to finalising an agreement on the terms of Britain’s withdrawal.
However, with time running out, her hopes that EU leaders will agree that there has been sufficient progress for the negotiations to move on to phase two at their summit on December 14 and 15 hang in the balance.
Shadow Brexit secretary Sir Keir Starmer reiterated that Labour is prepared to keep membership of the single market and customs union up for negotiation following a transition period after withdrawal.
He told BBC Radio 4’s Today programme: “We say leave that option on the table. We certainly wouldn’t rule it out. We’d want to have a conversation. We are in the EU and we will leave the EU; the question then is, can we reach an agreement with the EU that gives us those benefits?”
Sir Keir said Norway’s deal with the EU was the nearest model for the UK, but a British version would need to be different.
He said the Government had got itself into a “contorted position” on the Northern Ireland border issue, and that a UK-wide agreement was needed.