The Prime Minister's chief Brexit negotiator hinted at progress in the trade talks last night, but insisted the EU still needed to be more "realistic" about the rules that the UK could accept.
Lord Frost said the last fortnight of informal talks with Michel Barnier, his Brussels counterpart, had been "relatively positive", as he suggested that the EU had scaled back on some "unrealistic ambitions".
The two sides have been at loggerheads over fishing rights in British waters and EU demands for the UK to continue following the bloc's rules on industrial subsidies.
Government sources have also claimed that the EU's method of conducting the negotiations has led to "paralysis", with Mr Barnier insisting on slowing down talks on less contentious issues in order to focus on the most difficult areas.
Mr Barnier is believed to have given ground on his previous insistence on "parallelism" in the talks. Lord Frost said: “As we enter the final stages of negotiations we are all focusing on what it might take to get a trade agreement in place.
"An agreement is still very much possible, but equally very far from certain. The last two weeks of informal talks have been relatively positive, but there remains much to be done, and time is short.
“We have been saying from the beginning of this process that we simply want a standard free trade agreement like Canada’s. Sadly the EU’s position has not been so straightforward and we continue to be asked to accept provisions which do not reflect the reality of the change which our exit from the EU brings.
"If the gaps in these areas are to be bridged, the EU still needs to scale back more of its unrealistic ambitions and work on more realistic policy positions. I hope this will be possible this coming week, and I and my team are ready to work as hard as necessary to move things forward.”
On Monday, Michael Gove will take part in a meeting of the joint UK-EU committee on the Withdrawal Agreement, when he is likely to come under renewed pressure to drop provisions in the Internal Market Bill which would allow ministers to override parts of the 2019 deal.
Meanwhile, the Confederation of British Industry released polling showing that three-quarters of businesses (77 per cent) favour the two sides striking a post-Brexit trade agreement, with 18 per cent expressing no preference between a deal or no deal. Some 4 per cent favoured a no-deal outcome.
Dame Carolyn Fairbairn, the CBI Director-General, who was pictured alongside Rishi Sunak, the Chancellor last week, said: “Next week Brexit talks enter the eleventh hour. Now must be the time for political leadership and the spirit of compromise to shine through on both sides. A deal can and must be made.
“More than three-quarters of businesses want to see a deal that will support people’s jobs and livelihoods. This matters for firms and communities across Europe."