EU and UK give each other until Sunday to save Brexit talks

British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen have given themselves until Sunday to decide on the future of post-Brexit negotiations, after a three-hour dinner left the two sides "far apart."

Johnson came to Brussels on Wednesday in a last gasp effort to salvage trade talks that are teetering towards failure and the two leaders agreed that their negotiators should attempt one last push to bridge the divide.

"We had a lively and interesting discussion on the state of play across the list of outstanding issues," Von der Leyen said in a statement after the dinner at her Brussels' headquarters.

"We gained a clear understanding of each other's positions. They remain far apart," she added.

A senior UK source said the talks were "frank" and that it remained unclear whether the "very large gaps" between the two sides can be bridged.

The leaders agreed to further discussions by their negotiating teams "over the next few days" and that a "firm decision" should be taken by Sunday, the UK source said.

EU negotiator Michel Barnier and his UK counterpart David Frost have narrowed the gaps over eight months but London insists it will reclaim full sovereignty at the end of the year after half-a-century of close economic integration.

READ MORE: Brexit trade talks reach crisis point

European sources said the two men and their teams would return to the talks on Thursday morning, just ahead of a summit of the EU's national leaders that will once again be clouded by doubts over cross-Channel ties.

The prime minister had jetted over to the city where he made his name as an EU-bashing newspaper reporter and met Von der Leyen in the Berlaymont, headquarters of the EU Commission.

After posing for press pictures, they headed in for a meeting that was treated as the almost-final chance of a breakthrough before Britain leaves the EU single market at the end of the year.

Though prospects for a breakthrough were slight, Johnson "does not want to leave any route to a possible deal untested," the source said, after the two ate a dinner of scallops and steamed turbot, two of the seafood varieties that European boats fish for in British waters.

READ MORE: UK, EU strike Northern Ireland pact but Brexit trade deal remains in doubt

Talks are mainly blocked over the issue of fair competition, with Britain refusing to accept a mechanism that would allow the EU to respond swiftly if UK and EU business rules diverge over time and put European firms at a disadvantage.

Fishing is another sore issue, with Europe eager to keep as much access as possible to the UK's bountiful waters.

"A good deal is still there to be done," Johnson had told the UK parliament before setting off for Brussels, while insisting Britain would "prosper mightily" with or without agreement.

'Still a chance' 

If Britain leaves the EU single market in three weeks without a follow-on trade agreement, the damage caused by delays to travellers and freight at its borders will be compounded by import tariffs.

In Berlin, Germany's Chancellor Angela Merkel said there was still a chance for a deal. But she warned: "We must not endanger the integrity of the common market."

Merkel said Britain would have to accept that as UK and EU laws move apart after Brexit there must be a way to ensure a "level playing field for tomorrow and the day after tomorrow."

"Otherwise we'd end up with unfair conditions for competition, which we can't ask of our companies," she said.

Merkel and the other EU leaders, including a sceptical French President Emmanuel Macron, are to meet in Brussels on Thursday for their planned EU summit, but Johnson was not invited.

Von der Leyen will update the member state leaders on her talks with the British premier and offer a clear indication of where she believes the talks are headed, diplomats said.

The dinner came after Johnson spoke by telephone to Von der Leyen on Monday when the latest round of negotiations between Barnier and Frost broke off without agreement.

The outcome of the dinner came as no surprise as both sides had expressed pessimism ahead of the encounter.

In recent weeks several member states, led by France, have expressed concern that Germany and Von der Leyen's European Commission have been too ready to compromise with London.