European Union chief Brexit negotiator Michel Barnier has said that the future relationship negotiations would be in crisis if the UK introduced fresh legislation next week which breached the Northern Ireland Protocol.
Mr Barnier told EU ambassadors this morning that if the proposed Finance Bill contained clauses which "breached international law" there would be a complete breakdown in trust between both sides.
He delivered the blunt warning near the end of a briefing of member states this morning on the state of play in the negotiations.
Minister for Foreign Affairs Simon Coveney ruled-out any extension of the transition period for the UK leaving the European Union.
Addressing the Seanad Committee on Brexit, he said bluntly: "There will be no extra time. From 1 January, UK will be outside the Single Market and the Customs Union. This means new controls and procedures must be applied to any goods moving to, from or through Great Britain."
Calling for business and politicians to prepare for the inevitability of Brexit, he said: "Irrespective of the outcome of the ongoing negotiations, the end of the transition period will bring substantial and lasting change and action must be taken now."
There have been reports that the UK Finance Bill, expected next week, would contain clauses which give British ministers the powers to decide unilaterally on elements of the Northern Ireland Protocol, such as the potential imposition of tariffs on goods moving from Britain to Northern Ireland.
The EU has already taken legal action against the UK over the Internal Market Bill, which would overturn parts of the protocol.
When it was published in September, the British government admitted that would break international law, but in a limited and specific way.
Mr Barnier told EU ambassadors that the coming hours were vital if a deal were to be done.
There were still considerable gaps on the so-called level playing field, fisheries and how disputes would be settled.
However, he said he would not let the timetable for ratification mean that the EU signed up to what he called a bad deal.
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"We are quickly approaching a make or break moment in the Brexit talks," Mr Barnier told a video meeting of European envoys, a diplomat said, in an account of the video talks confirmed by other sources.
"Intensive negotiations are continuing in London, but as of this morning it is still unclear whether negotiators can bridge the gaps on issues like level playing field, governance and fisheries," Barnier said.
Diplomats said Mr Barnier thought the outcome of the eight months of talks would be decided in the next few days, possibly late on Thursday or Friday.
UK officials do not recognise a formal deadline, but privately agree the next few days could be crucial.
One European diplomat said there was "frustration" among the member state envoys and that "for the moment, we're still not there."
"As of today we're not able to say whether there will be an agreement or not," the diplomat added.
Mr Barnier's early morning briefing to envoys came after certain member states - notably France and the Netherlands - expressed concerns that the EU negotiation team was giving in too much to UK demands.
"This was mostly an exercise to calm nerves in Paris and elsewhere and to reassure member states that team Barnier will continue to defend core EU interests, including on fisheries," a third diplomat said.
A diplomat from a country with concerns that Mr Barnier might give too much ground, said: "I am not sure what Barnier said managed to assuage concerns. Bridging the divide would require too big a leap."
Mr Barnier spoke to the EU27 officials by videolink from London, where he has been locked in intense talks with his UK counterpart David Frost and their teams.
Failure to clinch a deal would cause deep economic disruption between the two sides at a time when the European economy is already deep in a downturn due to Covid-19.
The main source of discord is over how to establish some sort of EU-UK alignment on health, labour and environment regulations, while also ensuring Britain's newly found sovereignty.
In addition, a few countries are especially worried about the fate of fishing access to British waters for European fishermen, with the UK wanting to keep tight control.
Any deal would face ratification by EU member states as well as the British and European parliaments, a process that would begin after about two weeks of translation and legal scrutiny.
Mr Barnier also briefed key MEPs who are highly reluctant to see their vote kicked to next year, possibly after the deal was implemented on a provisional basis.
"Swift progress is of the essence," said German MEP David McAllister, after European parliamentarians had their own video meeting with Mr Barnier.
"An agreement needs to be reached within very few days if (member states) and Parliament are to complete their respective procedures before the end of the transition period. Democratic scrutiny is not negotiable," he said.
EU must proceed with Brexit no-deal contingency plans - Taoiseach
Stalled Brexit talks have reached a point where the EU must now proceed with preparations for a potential no-deal outcome, Taoiseach Micheál Martin has said.
"We are in the final critical phases. I've every confidence that our chief negotiator Michel Barnier will use every best endeavour and every opportunity this week to try and deliver a deal," Mr Martin told the Dáil.
"One month out from the end of transition, we have reached a point in time where prudence demands we must proceed with preparations for European Union contingency measures in case of no deal. I expect to see this being discussed in Brussels in the coming week and in advance of the December European Council."
Additional reporting Paul Cunningham, AFP