How DUP wrecked Brexit deal with one phone call: PM was ready to back concession on Irish border that could see Northern Ireland 'stay in the EU' - but her DUP allies pulled out at the last moment

• e-mail

Theresa May's attempt to strike a Brexit deal today was de-railed by a phone call with DUP leader Arlene Foster.

Irish Prime Minster Leo Varadkar last night said Britain had been poised to sign an agreement that was acceptable to him and other EU states at lunchtime today. 

But as details of a major concession that critics say would leave Northern Ireland effectively still bound by EU rules leaked, Mrs Foster went on TV to denounce any settlement that split the province from the rest of Britain.

The Prime Minister then spoke to Mrs Foster by telephone during a break in marathon talks in Brussels. After the call, she was no longer able to sign up to language promising 'regulatory alignment' between the Republic and Northern Ireland.

After the breakdown, Mrs May and EU Commission President Jean-Claude Juncker appeared in front of the cameras to admit there would not be a deal today. They said talks would resume later in the week - potentially as soon as Wednesday.

Following his own meeting with Mrs May, EU Council President Donald Tusk then said a deal to allow the start of trade talks was still possible before a crucial summit on December 14 but that time was 'tight'.

Mr Varadkar said he had been ready to sign up to what was on the table but that he was told by Brussels Britain was backing off.

At a press conference in Dublin he said he was 'surprised and disappointed' Britain could not sign up to what 'was agreed earlier'. Mr Varadkar stopped short of directly blaming the DUP but said he could comment on UK party politics.   

The EU commission president Jean-Claude Juncker praised Theresa May as a 'tough negotiator' and both politicians signalled that there would be more talks later this week

The Prime Minister and Mr Juncker left immediately after making their statements, without taking any questions from the press pack

Irish Prime Minister Leo Varadkar (pictured at a press conference in Dublin tonight) said he had been ready to sign up to what was on the table but that he was told by Brussels Britain was backing off

EU Council President Donald Tusk (pictured tonight with Theresa May) said a deal was still possible before the summit on December 14 but that time was 'tight'

Donald Tusk tonight said he had hoped to present his draft guidelines for trade talks tomorrow but that there was a further delay 

The Prime Minister had to break off from lunch with European Commission chief Jean-Claude Juncker to field the call from Arlene Foster.

Before the lunch, EU diplomats and journalists had been told to expect a 15-page document outlining details of a deal that would clear the way for trade talks to begin this month.

A senior Tory said the DUP had ‘gone ballistic’ over a proposed compromise which they feared would result in ‘regulatory divergence’ from the rest of the UK and an effective border in the Irish Sea. The party even threatened to pull out of a deal to prop up the Government at Westminster. ‘They are seething,’ the source said.

DUP MP Sammy Wilson described the proposals as a ‘unionist nightmare’ which could lead to the break-up of the UK.

But the British proposals are understood to be more subtle. Mrs May is thought to be proposing an arrangement which would require the whole UK to retain ‘regulatory alignment’ with the EU on a narrow range of issues that affect the Irish border. These include energy, agriculture and transport.

The UK would commit to the same regulatory outcomes in these areas as the EU, but would be free to achieve them by different routes. Crucially, the UK would be free to diverge from EU rules in all other areas.

The proposed compromise would allow Northern Ireland to retain the same rules as the Republic in critical areas without splitting from the rest of the UK.

But it will prove highly controversial with some Tory MPs.       

Earlier, Ms Foster told journalists at Stormont: 'We have been very clear that Northern Ireland must leave the EU on the same terms as the rest of the UK, and we will not accept any form of regulatory divergence that separates Northern Ireland economically or politically from the rest of the UK.'

East Antrim MP Sammy Wilson went further by warning that his party had 'leverage', adding that the proposals for regulatory alignment were a 'unionist nightmare'. 

'If she gives in on special demands for Northern Ireland then she will be giving in on special demands for Scotland and other parts of the United Kingdom,' he said.

Former Ulster Unionist leader Lord Trimble said: 'I think this is a very bad idea.' 

Allies of the PM said that, unlike David Cameron, she had not accepted the first deal offered by Brussels. One said Dublin and Brussels had tried to ‘bounce’ her into a deal by briefing broadcast media that it was all but done.

He added: ‘We need to maintain the integrity of our red lines and … not be like a former prime minister who did take exactly what he was given first time round.’

The talks foundered after sources in Dublin and Brussels leaked draft versions of a text they hoped to agree with Mrs May on the status of the Irish border.

The leaks suggested the PM was willing to sign a deal that would allow Northern Ireland ‘no regulatory divergence’ from Dublin, effectively tying it to the EU’s customs union. A later leak said the UK had agreed Northern Ireland would remain in ‘regulatory alignment’ with the EU in some key areas. 

Last night Conservative Eurosceptics warned Mrs May against further compromise over the Irish border and the role of the European Court of Justice in policing EU citizens’ rights after Brexit.

Tory ex-leader Iain Duncan Smith said: ‘We have to be very careful. Northern Ireland cannot see any regulatory divergence from the UK. And we cannot get into a position where EU citizens have more rights than British citizens.’

Jacob Rees-Mogg accused Dublin of spreading ‘propaganda’, adding: ‘You cannot align the regulation of one part of the UK with the EU. And if we align the whole of the UK with the regulation of the EU, we haven’t left the EU.’

Pro-Remain Tory Anna Soubry said it was untenable to have one part of the UK diverging from the rest – but said the solution was to keep the whole country in the single market.  

Following a meeting of Tory MPs in Westminster tonight a senior Brexiteer said many Conservatives shared DUP concerns about any solution which left Northern Ireland working to different rules than mainland Britain. 

The MP said it would 'completely intolerable' and accused the Irish government of leaking 'propaganda' to undermine the talks. 

Standing alongside Mr Juncker in Brussels tonight, Mrs May said: 'We have been negotiating hard. And a lot of progress has been made. And on many of the issues there is a common understanding.

'It is clear, crucially, that we want to move forward together.

'But on a couple of issues some differences do remain which require further negotiation and consultation.

'And those will continue, but we will reconvene before the end of the week and I am also confident that we will conclude this positively.'

In an apparent attempt to bolster her position, Mr Juncker praised her as a 'tough negotiator' and both politicians signalled that there would be more talks later this week.

'I have to say that she's a tough negotiator, and not an easy one, and she's defending the point of view of Britain with all the energy we know she has, and this is the same on the side of the European Union,' he said.

'Despite our best efforts and significant progress we and our teams have made over the past days on the three main withdrawal issues, it was not possible to reach a complete agreement today.' 

After their statements the leaders left without taking questions from journalists, as Mrs May headed to another meeting with EU council chief Donald Tusk.

After those talks, Mr Tusk said: 'Met with PM Theresa May. I was ready to present draft EU27 guidelines tomorrow for Brexit talks on transition and future. 

'But UK and Commission asked for more time.

'It is now getting very tight but agreement at December EU Council is still possible.' 

EU leaders will convene in Brussels on December 14 but realistically an agreed deal must be largely in place in advance.  

The dangers of the concession on Northern Ireland had been laid bare by responses from Nicola Sturgeon and London Mayor Sadiq Kha, who seized on the news to argue that Scotland and London respectively should be given similar leeway to 'stay in the single market'.

Downing Street played down the claims and insisted the 'territorial and economic integrity of the UK will be protected'.

Labour leader Jeremy Corbyn slammed the failure to strike a deal today. 

He said: 'The real reason for today's failure is the grubby deal the Government did with the DUP after the election.

'It is disappointing that there has not been progress in the Brexit negotiations after months of delays and grandstanding.'  

DUP leader Arlene Foster said the party would 'not not accept any form of regulatory divergence that separates Northern Ireland economically or politically from the rest of the UK'

Foreign Secretary Boris Johnson (right) and his deputy Sir Alan Duncan (left) emerged to receive a Christmas tree at the Foreign Office today amid the high stakes diplomacy 

Sir Alan appeared in high spirits in the chilly London weather this afternoon while the Prime Minister was battling for a Brexit deal in Brussels 

 The British side was said to have signed up to enough 'continued regulatory alignment' between Northern Ireland and the Republic to 'support North South cooperation and the protection of the Good Friday agreement'.

That left considerably more wriggle room than the initial wording of 'no regulatory divergence'.

Mr Tusk hinted that the move would be enough to secure a deal, tweeting: 'Tell me why I like Mondays! Encouraged after my phone call with Taoiseach @campaignforleo on progress on issue of Ireland.

'Getting closer to sufficient progress at December.' 

In his much delayed appearance in Dublin, Mr Varadkar said that he had confirmed Ireland's agreement to the text to both Mr Juncker and European Council president Donald Tusk.

'I am surprised and disappointed that the British Government now appears not to be in a position to conclude what was agreed earlier today,' he said. 

'I accept that the Prime Minister has asked for more time, and I know that she faces many challenges and I acknowledge that she is negotiating in good faith.

'But my position and that of the Irish Government is unequivocal and is supported by all the parties in Dail Eirann and I believe the majority of people on these islands.

'Ireland wants to proceed to phase two - It's very much in our interests to do so. However we cannot agree to do this unless we have firm guarantees that there will not be a hard border in Ireland under any circumstances.'

Since the break-up of talks, Mr Juncker had confirmed that 'Ireland's position remains Europe's position', said Mr Varadkar.

He added: 'I still hope this matter can be concluded in the coming days, as was agreed.'

Earlier in the day, European council president Donald Tusk appeared to hint that a deal was now effectively in place

PM Theresa May arrived in Brussels today for talks with jean-Claude Juncker, who welcomed her warmly

Mrs May, pictured with Mr Juncker in Brussels today, is said to have signed up to enough 'continued regulatory alignment' between Northern Ireland and the Republic to 'support North South cooperation and the protection of the Good Friday agreement'

Striking a jubilant tone, Irish deputy PM Simon Coveney told reporters earlier this afternoon: 'We have now a language that gives us the safeguards we need; that there is reassurance for people there is not going to be a re-emergence of a border.

'Irish concerns are going to be addressed fully.'  

Scottish First Minister Ms Sturgeon tweeted: 'If one part of UK can retain regulatory alignment with EU and effectively stay in the single market (which is the right solution for Northern Ireland) there is surely no good practical reason why others can't.'

Meanwhile, Mr Khan said: 'Huge ramifications for London if Theresa May has conceded that it's possible for part of the UK to remain within the single market & customs union after Brexit.

'Londoners overwhelmingly voted to remain in the EU and a similar deal here could protect tens of thousands of jobs.'

Welsh First Minister Carwyn Jones then joined in to insist: 'We cannot allow different parts of the UK to be more favourably treated than others.

'If one part of the UK is granted continued participation in the Single Market and Customs Union, then we fully expect to be made the same offer.' 

Regulatory alignment between Northern Ireland and the Republic would likely mean both sides following the same rules governing trade, to ensure that goods can continue to move freely across a 'soft' border with no checks. 

But there are fears among some unionists in Northern Ireland that it could lead to the effective drawing of a new border in the Irish Sea between the province and the rest of the UK, if the Westminster Government decides it wants to diverge from EU rules. 

Nicola Sturgeon seized on the news to argue that Scotland should be given similar leeway to 'stay in the single market'.

London Mayor Sadiq Khan leapt on the bandwagon to demand a special deal for London 

Ex-Ukip leader NIgel Farage condemned the apparent concession, tweeting that it would damage the integrity of the UK

The dramatic political moves today appear to have been carefully choreographed, and Tory and DUP sources stressed they have been in close contact throughout the process.

Although Ms Foster's words seemed designed to reassure supporters in Northern Ireland, she notably stopped short of condemning it outright.

She insisted Mrs May 'understands the position of this party', adding: 'The prime minister has told the House of Commons that there will be no border in the Irish Sea. 

'And the Prime Minister has been clear that the UK is leaving the European Union as a whole, that the territorial and economic integrity of the United Kingdom will be protected.'

Ms Foster said the DUP wanted to see a 'sensible Brexit, a Brexit where the common travel area is continued'.

She added: 'The Republic of Ireland government for their part claim to be guarantors of the Belfast agreement but they are clearly seeking to unilaterally change that Belfast agreement without out input or our consent. 

'And of course we will not stand for that.' 

Sources in the party initially suggested that the text of the border proposal was being selectively leaked and misinterpreted. 

But opinion appeared to slip against Mrs May at the last moment, as the shape became clearer 

Michel Barnier (second from left) and Jean-Claude Juncker (second from right) held talks with a European parliament team led by Guy Verhofstadt (right) ahead of the meeting with Mrs May

Taoiseach Leo Varadkar (pictured arriving at work in Dublin today ahead of a Cabinet meeting) has thrown fresh doubt on Brexit talks after objecting to Irish border proposals

Ex-Ukip leader NIgel Farage had condemned the concession, tweeting: 'This UK Government's bitter betrayal of 17.4 million people today is a concession too far, for it will lead to endless problems in Scotland and it damages the integrity of the United Kingdom.'

The EU has insisted this week is the last opportunity to reach an agreement that means starting trade talks can be signed off at the bloc's summit in 10 days' time. The next gathering is not until well into next year.

But Downing Street sources have played down the idea that today represents a hard deadline.

Speaking on his way to join the talks today, Mr Davis said: 'We've put seven months of work, both sides, into getting to this point and we are hoping that Mr Juncker today will give us sufficient progress so that we can move on to the trade talks. 

'The decision, of course, won't be taken until 15 December but that's what we are hoping for, because trade talks are of enormous importance to the United Kingdom and to Europe.' 

Mrs May had hoped to secure agreement on moving on to trade talks after persuading her cabinet to back an improved divorce payment worth up to £40billion to the EU.

In return, she is demanding assurances that Brussels will agree a comprehensive trade deal.

But, despite round-the-clock talks this weekend, key differences remained as of this morning between the two sides, particularly over the Irish border.

Asked about the claims that the UK was committing to 'no regulatory divergence' on the Island of Ireland, the PM's spokesman said: 'The PM has been clear that the UK is leaving the EU as a whole, and the territorial and economic integrity of the UK will be protected.' 

Ministers have been alarmed by the lack of a breakthrough. Some, including the Brexit Secretary David Davis, are warning privately that Mrs May will have to walk away if there is no agreement at next week's EU summit.

One source familiar with the talks said: 'If we don't make sufficient progress at this stage then the process is over.'

Ahead of his lunch with Mrs May, Mr Juncker was pictured meeting EU chief negotiator Michel Barnier and the European Parliament's Brexit team, led by Guy Verhofstadt.

Mr Juncker's chief spokesman Margaritis Schinas said they were 'working for a fair deal'.  

A union flag was raised alongside EU counterparts in Brussels today ahead of the meetings 

David Davis was seen leaving Whitehall on his way to the meetings in Brussels today

Senior German MEP Manfred Weber - a close ally of Chancellor Angela Merkel - said problems remained on citizens' rights and the Irish border.

The leader of the European Parliament's centre-right EPP Group tweeted: 'In Brexit negotiations, money is one of the problems, but it is not the biggest one. 

'We are much more concerned about the fact that negotiations are stalled on the protection of EU citizens' rights & on the Irish case.

'We will not change our red lines. The lives of millions of families are at stake. If no clear commitment is made, the @EPPGroup will not be ready to assess the progress made as sufficient to enter a 2nd phase of negotiations.' 

Health Secretary Jeremy Hunt yesterday warned Eurosceptic MPs not to limit Mrs May's room for manoeuvre. 'The choice we face is not between this Brexit or that Brexit,' he said.

'If we don't back Theresa May we will have no Brexit, and she is doing an unbelievably challenging job amazingly well.'

Mr Hunt's intervention came as 30 Eurosceptics set down seven 'red lines' over Brexit.

The Leave Means Leave group said Mrs May should not make any payment to Brussels unless she received clear pledges in return, including a free trade deal and agreement that the UK would not have to accept any new EU regulations or European court rulings during a two-year transition period.

Signatories of the letter include former cabinet ministers Lord Lawson, John Redwood and Owen Paterson. They urge Mrs May to abandon the talks completely and go for a no-deal Brexit if Brussels refuses to agree terms next week.

But Mr Paterson dismissed the prospect of Eurosceptics voting against the government. 'The fact is we have incredibly close relations with the Republic of Ireland, this trade is generally small, as I have just said it's regular, and it can be handled with modern communication techniques, electronic invoicing etc.' 

Today's talks are designed to determine whether 'sufficient progress' has been made on three key issues to persuade the EU to move on to trade talks.

The PM was expected to telephone Irish Taoiseach Leo Varadkar (pictured), but the call did not happen and No10 insisted it had not been firmly scheduled

The Prime Minister will travel to Belgium this morning ahead of a lunch with European Commission president Jean-Claude Juncker (pictured right) and chief EU Brexit negotiator Michel Barnier. She will then hold further talks with EU Council president Donald Tusk

The issues at the centre of the row are the size of the divorce bill, the rights of EU citizens living in the UK and the status of the border between Northern Ireland and the Republic. 

The divorce bill is now seen as the most straightforward issue, with EU sources indicating Brussels is ready to accept Mrs May's revised offer.

But differences remain on citizens' rights and Northern Ireland.

The Prime Minister had hoped to offer a 'compromise' on citizens' rights, which would give the European Court of Justice a minor, indirect role. But she has not yet persuaded her cabinet to sign it off.

The deal would allow the UK's Supreme Court to ask the ECJ for guidance in cases brought by EU citizens where there is no existing case law. EU citizens would lose the right to appeal directly to the ECJ – a key Brussels demand.

Nigel Farage was dragged into the divorce bill row yesterday because his £73,000-a-year MEP's pension will be part-funded by Britain's proposed £40billion payment. 

The UKIP leader rejected calls to give up the money, saying: 'Why should my family suffer?'