Post-Brexit trade talks between the UK and EU have reached a "crucial moment", with both sides making a "final push" to reach a deal, Michel Barnier has said.
The EU's chief negotiator said both sides were working to find a resolution before the end of the transition period on December 31.
Mr Barnier was briefing ambassadors for the 27 EU countries and MEPs about the state of the talks as time runs short for a deal to be reached.
In a sign of the intensive diplomatic activity, Boris Johnson is in “close contact” with European Commission president Ursula von der Leyen.
Downing Street sources said they were speaking “from time to time given there isn’t long left” until the end of the Brexit transition period next week.
But No 10 refused to confirm Politico reports that they spoke on Monday about proposals to address the issue of fishing rights, one of the final remaining barriers to a deal.
Speaking to reporters in Brussels, Mr Barnier said: “We are really in a crucial moment and we are giving it a final push.
“In 10 days, the UK will leave the single market.”
The prime minister continued to insist the UK will “prosper mightily” without a deal, despite warning that it could add further damage to an economy already ravaged by coronavirus.
Trade between the UK and EU will face tariffs and quotas from January 1 unless a deal is reached.
But talks in Brussels remain difficult, with “significant differences in key areas”, including fishing and rules on maintaining fair competition.
Downing Street insiders flatly rejected reports that there has been a breakthrough in the row over fishing quotas.
Reports suggested the UK had offered a cut of about a third in the amount of fish EU vessels catch in British waters over a five-year period.
That is down from an initial demand to cut it by 60% over three years, but the compromise was reportedly rejected by Brussels.
At a press conference on Monday, Mr Johnson said World Trade Organisation terms – the default if there is no deal – would be “entirely satisfactory”.
“Prosper mightily remains an extremely good description of life after January 1 either way,” he insisted.
The Office for Budget Responsibility has forecast that a no-deal outcome could result in a 2% hit to gross domestic product – a measure of the size of the economy – in 2021.
That would equate to around £45 billion being wiped off the value of the UK economy.
Brexit trade talks - the sticking points at a glance:
- Fishing rights: The UK wants total control over its own fishing waters after the Brexit transition period ends, with a 12 mile exclusion zone around the British Isles banning all foreign vessels. The EU wants the UK to stick to the Common Fisheries Policy, an EU agreement which gives member nations the rights to fish in European waters.
Level Playing Field: This is a concept all EU nations agree to, which ensures member nations cannot undercut others by setting their own rules on issues such as the environment, taxation and state aid. The EU says a zero-tariff trade deal is dependent on the UK agreeing to a level playing field. The UK disagrees, saying a fundamental aspect of Brexit is that the UK will be able to set its own rules.
Governance of a deal: It's likely that any trade deal will eventually result in disputes. The EU wants the European Court of Justice to be the final authority in ruling over disputes. The UK says the ECJ should have no role and final decisions should be made by a bespoke arbiter. But the statements from both sides suggested that while further discussions would be held, substantial movement on the key issues had not been made.