EU leaders say key Brexit issues still not resolved in fresh blow for Theresa May

EU leaders have thrown Theresa May’s hopes of a Brexit deal this month into fresh jeopardy, after warning that crucial obstacles remain.

A meeting in Brussels was told there had been no significant progress on how to settle future disputes over the Irish border, with the two sides also still far apart on fishing rights.

The verdict, delivered at a briefing of EU27 ambassadors by the Brussels negotiating team, cast fresh doubt on the prime minister’s hopes of agreeing an outline deal by the middle of next week.

If that deadline is missed, it is unlikely that an emergency summit to sign it off can be held in November – throwing back a final agreement until the middle of December.

That would leave the UK having to ramp off hugely expensive no-deal preparations and in danger of being unable to pass all necessary legislation before Brexit day next March.

An “optimistic” timetable, floated by Downing Street, imagined Dominic Raab, the Brexit secretary, and Michel Barnier, the EU negotiator, was presented with a legal text agreed by officials on Tuesday.

But the ambassadors’ meeting was told, by Mr Barnier’s deputy Sabine Weyand, that there was no agreement on a joint review mechanism to allow the UK to break free of the Irish border “backstop”.

Liam Fox, the international trade secretary, raised the stakes when he insisted that decision must be made alone by the “sovereign British government”, without EU involvement.

The fear of pro-Brexit Tories is that the UK will be locked indefinitely into the EU customs union – unable to sign its own trade deals – unless it can end the backstop unilaterally.

That is unacceptable to Brussels, which – according to one report – has also rejected Britain’s proposal of independent arbitration, to decide when technology is available to avoid border checks.

The EU is believed to have insisted it would be legally impossible for such a crucial decision to be made by a body other than the European Court of Justice – which is equally unacceptable to the UK.

Britain has also demanded that the fishing sector be excluded, even as it seeks for the entire UK to stay in the customs territory if the backstop is required after the transition period, at the end of 2020.

EU member states with big fishing industries have protested they must still have access to British waters, in return for the UK enjoying tariff-free access to EU markets, where it exports 75 per cent of its total catch.

The backstop would also require the UK to retain Brussels competition, state aid and tax rules, effectively staying in the EU single market, say Brexiteers.

It was also reported that the ambassadors have told the European Commission they must scrutinise any deal reached before it is made public and a special summit called.

If the member states insist on several days to go through the text, that would appear to kill off a summit this month – 25 November having been put forward as the last possible date.

The EU has said it requires close to a fortnight for its capitals to prepare, although Downing Street has suggested a week should be sufficient.