Spain says agreement reached on Gibraltar status in Brexit negotiations

Ivan Rogers  Britain's Permanent Representative of the United Kingdom to the European Union until January 2017.    REUTERS  Neil Hall

Ivan Rogers Britain's Permanent Representative of the United Kingdom to the European Union until January 2017. REUTERS Neil Hall

British PM Theresa May appeared to open the way to extend the post-Brexit transition period until December 2021, as European Union leaders offered an olive branch to her in a bid to break the impasse during the European Union summit on Wednesday (17 October).

May mentioned the possibility of prolonging the transition immediately after saying the leaders had made "real progress" - something she has said repeatedly in recent days.

But the two sides disagree on how to resolve the issue.

But a longer transition will be hard for the prime minister to sell.

"A further idea that has emerged ― and it is an idea at this stage ― is to create an option to extend the implementation period for a matter of months, and it would only be for a matter of months... And it would only be for a matter of months".

Asked if Mrs May was going to have to drop the support of the DUP in order to push through a Brexit deal, Mr Varadkar said it was "her judgment call".

Mr Lidington said how much it would cost to extend the transition period was something that would have to be "teased out" during the negotiations.

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Ahead of Wednesday's meeting, European Council President Donald Tusk said a no-deal scenario is "more likely than ever" before the U.K.is scheduled to leave the EU in March 2019.

"EU negotiators and the Dublin Government must ensure the backstop becomes legally enforceable in any Brexit withdrawal agreement".

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".

With no deal in place, the European Union is proposing that Britain be tied to the bloc for an extra year, which would extend the Brexit transition period to the end of 2021.

Leave-supporting cabinet ministers Penny Mordaunt and Michael Gove also signalled discomfort at the prospect of an extension to the transition period.

But May, hemmed in by opponents in her own party and even in her own cabinet, has no such proposals.

Business representatives attacked the failure of this week's summit to result in a Brexit breakthrough.

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There was none of the acrimony and drama of Salzburg, but the summit, billed as the moment of truth, ended not with a bang but a whimper.

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They have been desperate to avoid a repeat of last month's Salzburg summit, where European Union leaders openly expressed their frustration at what they regarded as the UK's intransigence.

The prime minister remained bullish of a Brexit deal coming eventually.

Speaking after Tusk and Juncker, May said Thursday that there would be more hard moments ahead as they reach the final stages of the talks, but added that she was confident in her ability to secure a good deal that is agreeable to all parties.

Labour leader Jeremy Corbyn said: "The prime minister has today failed to meet the deadline she herself set for a Brexit deal".

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