European Union leaders meeting in Brussels tomorrow and on Friday to discuss Brexit will say that progress in talks with Britain is "still not sufficient" to seal a new trade deal, according to a draft summit decision seen by Reuters.
As the year-end deadline approaches to put in place a new relationship, the 27 national EU heads will also agree to step up contingency preparations for an abrupt economic split without a deal that avoids tariffs or quotas.
With €1 trillion of annual trade at stake, the summit will also tell the EU's Brexit negotiator, Michel Barnier, to intensify talks with Britain to reach and implement an agreement to govern relations after 31 December, when the current standstill agreement expires.
They will also tell Britain it must implement in full its earlier Brexit divorce treaty with the bloc, according to the draft, prepared in advance of the meeting.
British Prime Minister Boris Johnson is due to talk to the head of the bloc's executive, European Commission President Ursula von der Leyen, later today to discuss next steps on the eve of the leaders' summit.
EU ministers told Britain yesterday to make concessions on fisheries, dispute settlement and guarantees of fair competition in the tortuous talks, with Germany saying they were at a "critical stage".
These three areas have long been the main sticking points, although both sides say some progress has been made in recent weeks.
The EU says a deal must be agreed this month to leave time for ratification by the European Parliament.
However, EU diplomats have told Reuters the bloc is gearing up to negotiate until mid-November to avoid being assigned blame if the talks fail.