Theresa May has seen an EU summit pass with no Brexit breakthrough as she was hit by a growing backlash over plans to lengthen the UK’s transition period.
There had been hopes this week’s gathering of EU leaders in Brussels – previously dubbed the “moment of truth” for Brexit – could overcome the impasse in negotiations.
But the bloc ruled not enough progress has been made and so shelved plans for a special summit to be held next month to sign off on a deal.
French President Emmanuel Macron told Mrs May to “come back with a solution based on the necessary political compromise on the UK side” in order to achieve a deal.
Meanwhile, the prime minister faces another Brexit row with her own MPs when she returns to the UK.
Latest Brexit talks have seen a proposal for an “option” for the UK to extend its transition period out of the bloc beyond December 2020.
Mrs May stressed this would only be for “a matter of months” and is devised to help break the deadlock over agreeing a backstop solution for the Irish border issue.
A senior UK government official explained the plan as an “insurance policy” – to circumvent using interim measures to avoid a hard border on the island of Ireland – should a gap emerge between the end of the transition period and a future UK-EU trade deal being finalised.
Cabinet Office minister David Lidington, the prime minister’s de facto deputy, admitted the cost of extending the transition period would have to be “teased out” during negotiations.
European Commission President Jean-Claude Juncker backed the plan as a “good idea”, claiming “this prolongation of the transition period probably will happen”.
The EU would respond “positively” to any UK request to extend the transition period, European Council President Donald Tusk added.
However, Brexiteers have reacted with anger at suggestions the UK’s stay within the EU’s structures could be lengthened beyond what had previously been agreed as a 21-month period.
Tory MP Jacob Rees-Mogg, who chairs the European Research Group of eurosceptic MPs, told Sky News: “It seems to me to be a rather poor attempt at kicking the can down the road.”
He added that an extended transition period “means we are in the EU for longer, when the EU can make rules for the UK over which we would have no say and we would be paying for the privilege”.
Leave-supporting cabinet ministers Penny Mordaunt and Michael Gove also signalled discomfort at the prospect of an extension to the transition period.
The DUP, who Mrs May relies upon at Westminster to prop up her government, said an extended transition period would mean the UK continues to “pay but have no say” in Brussels.
Business representatives attacked the failure of this week’s summit to result in a Brexit breakthrough.
But, despite the absence of an agreement, there were more positive noises from key players compared to the acrimonious Salzburg summit in September.
Mr Tusk said: “We are in a much better mood than after Salzburg and I feel today we are much closer to final solutions and the deal.”
German Chancellor Angela Merkel, in words later cited by Mrs May, said: “Where there’s a will, there should be a way, and normally there is a way.”
However, Mrs Merkel also advised “each and every one ought to prepare” for the possibility of a “no-deal” Brexit, while Mr Macron also spoke of how France was preparing for a UK departure without an agreement.
However, the French president dismissed suggestions UK travellers might be denied visas to visit France as “fake news”.
He also denied his late-night Wednesday drink with Mrs Merkel and Belgium’s Charles Michel and Luxembourg’s Xavier Bettel was a snub to Mrs May, explaining the prime minister had already left the EU summit before they headed out.
The prime minister remained bullish of a Brexit deal coming eventually.
She said: “There is a lot of hard work ahead, there will be more difficult moments as we enter the final stages of the talks, but I’m convinced we will secure a good deal that is in the interests of the UK and of the EU.”
Labour leader Jeremy Corbyn said: “The prime minister has today failed to meet the deadline she herself set for a Brexit deal.
“More than two years after the referendum, the Tories still have no credible plan to deliver Brexit. They have spent far more time arguing with themselves than negotiating with the EU.
“Theresa May must now act in the national interest, not her party interest, and break the deadlock by delivering a deal that protects jobs and living standards.”