Talks will continue in Brussels on Monday in a final push to break the stalemate over a post-Brexit trade deal.
Boris Johnson and European Commission president Ursula von der Leyen will assess whether a deal can be salvaged following a weekend of tense negotiations.
The two leaders will speak on Monday evening – their second call in a little over 48 hours – after their top negotiators spent Sunday locked in detailed talks.
Lord Frost and his EU counterpart Michel Barnier were ordered back to the negotiating table.
However, Irish premier Micheal Martin, who has been closely following the talks process, warned that they remained on a “knife edge”.
He said there appeared to be a “very challenging issue” still to be resolved over the so-called “level playing field” rules on fair competition.
“Things are on a knife edge and it is serious. My gut instinct is that it is 50-50 right now. I don’t think one can be overly optimistic about a resolution emerging,” he told RTE.
The talks are set to continue in Brussels on Monday after Barnier briefed a breakfast meeting of ambassadors from the 27 EU member states on the state of play.
In the febrile mood surrounding the negotiation, British sources denied reports on Sunday that there had been a breakthrough on the thorny issue of future fishing rights.
Reports suggested they had agreed to a transition period for phasing in changes for access for EU boats to UK waters of between five and seven years.
However, a UK Government source said: “There’s been no breakthrough on fish. Nothing new has been achieved on this today.”
Meanwhile, Cabinet Office minister Michael Gove will meet his counterpart on the UK-EU joint committee in Brussels on Monday, the UK Government said.
A spokesman said: “The Chancellor of the Duchy of Lancaster will meet vice president Sefcovic today in Brussels to discuss issues related to their work as co-chairs of the Withdrawal Agreement joint committee.
“The Withdrawal Agreement joint committee oversees UK and EU implementation, application and interpretation of the Withdrawal Agreement, including the Northern Ireland Protocol.
“The work of the joint committee is separate from the ongoing FTA negotiations.”
EU negotiators are reported to be insisting on a “ratchet clause” under which the UK would face additional tariffs if it failed to mirror changes to EU rules on issues like environmental standards and workers’ rights.
During a round of broadcast interviews, environment secretary George Eustice warned the UK could not accept any conditions which “fundamentally violates our sovereignty”.
“Where it becomes difficult is where the EU starts to say things like, ‘unless you clear your agreement and regulations with us before, we reserve the right to pull certain parts of the agreement and to undermine what’s been agreed,’” he told Sky News.
Following their earlier call on Saturday, Johnson and Von der Leyen acknowledged that there were still “serious differences” to be resolved on fisheries and the mechanism for resolving disputes as well as competition rules.
While the two sides have been circling round the same issues for months, it is unclear whether the intervention of the leaders has created the political space for the negotiators finally to bridge the gap.
What is agreed is that time is rapidly running out.
If there is no deal by the end of the Brexit transition period at the end of the month, then Britain will leave the single market and the customs union and begin trading with the EU on World Trade Organisation terms, with the imposition of tariffs and quotas.
Before then it has to be ratified by both Houses of Parliament in the UK and the European parliament as well as signed off by the EU leaders.
There had been hopes that could happen at a two-day summit in the Belgian capital starting on Thursday – their final scheduled gathering of the year – but the timetable is looking increasingly tight.
France has publicly warned that it will veto any deal if it is unhappy with the terms, amid signs President Emmanuel Macron is anxious that Barnier is preparing to give too much ground in his determination to get a deal.
French assembly member Alexandre Holroyd, who represents French citizens living in northern Europe including the UK and is part of Macron’s party, said the talk of a deadline being in the coming days was hard to follow.
He told BBC Radio 4’s Westminster Hour: “I think it would be very difficult to explain to constituents if there is agreement say, on December 15, well apologies it’s too late because we’ve got two weeks and we don’t have enough to find a way to put it in place.
“So I think there is one deadline which is set in absolute stone which is December 31 and that is the absolute deadline.”
The mood around the negotiations is unlikely to be improved by the government’s decision to bring back to the Commons legislation enabling ministers to override elements of the “divorce” settlement with Brussels in breach of international law.
It means that on Monday – when Johnson and Von der Leyen are due to be speaking – MPs will vote on whether to overturn amendments by the House of Lords which removed the provisions in the UK Internal Market Bill relating to the Irish border.
On Wednesday, MPs will then go on to consider the Taxation (Post-Transition Period) Bill which contains further similar provisions, which have infuriated the EU.
An alert system has been set up in case a no-deal Brexit causes shortages in medicine supply, constitution secretary Michael Russell has said.
Talks with health boards are ongoing to make sure they are prepared for any disruption, he added.
Russell also said it was “inconceivable” that the SNP would vote for any Bexit deal in the House of Commons, despite saying the UK Government should come to an arrangement with the EU for the future beyond the transition period.
Speaking on Good Morning Scotland, he said the Scottish Government was discussing its no-deal planning for a third time.
He said: “We have put in place something called medicine supply alert notices which will flag up if there are any shortages coming down the track, and we’ll be able to address those.
“We’re working with the health boards and others on resilience and indeed there is another event this week.”
Russell said he would outline further issues of Brexit preparedness in a statement to Holyrood on Tuesday.
The UK Government was only looking for a “low deal” outcome from the ongoing talks, he said, which would lead to disruption on January 1.
He continued: “Having said that, and I am certainly no fan of Brexit at all, it is better to have some sort of arrangement than no sort of arrangement.
“Because with no sort of arrangement it is impossible to say what will happen next.”
Saying the SNP would not vote for a deal if the Prime Minister brought it to the House of Commons, Russell added: “It would be extraordinary if we were voting to give away all the rights that we have and all the things we have enjoyed for almost 50 years.
“That would be inconceivable.”
These are the next possible steps:
Monday, December 7:
The UK Internal Markets Bill returns to the House of Commons.
Ministers are seeking to overturn amendments by the Lords removing provisions enabling them to override measures in the Brexit “divorce” settlement relating to Northern Ireland.
Boris Johnson and European Commission president Ursula von der Leyen will speak by telephone – possibly as MPs are voting in the Commons – to assess the chances of an agreement.
Wednesday, December 9:
Second reading debate in the House of Commons for the Taxation (Post-Transition Period) Bill with further measures giving ministers the power to override the Brexit Withdrawal Agreement.
Thursday, December 10:
EU leaders meet in Brussels for a two-day summit where they could sign off on a deal if the two sides can overcome their remaining differences.
Thursday, December 31:
If there is no deal by then, the Brexit transition period will end and the UK will leave the single market and the customs union and move to trading with the EU on World Trade Organisation rules with the imposition of tariffs and quotas.
If there is a deal, it will have to have been approved by both Houses of Parliament in the UK and by the European parliament, although there may be just a bit of wriggle room.
EU law would allow the provisional application of the agreement from January 1, provided it has been signed off by leaders, while in Britain, ministers have suggested “you can always find more time” as long as the fundamental issues have been resolved.