EU leaders are set to call for post-Brexit trade talks to continue beyond the end of the week – the deadline suggested by Boris Johnson.
They are gathering in Brussels for a two-day summit and are due to discuss Brexit later.
But a draft summit conclusions document seen by the BBC says they will urge the UK to make the “necessary moves” towards striking an agreement.
No 10 says the prime minister will decide the “next steps” on Friday.
Mr Johnson expressed “disappointment” at recent progress in a pre-summit call with EU Commission President Ursula von der Leyen on Wednesday, according to Downing Street.
Both sides are calling on each other to compromise on key issues, including fishing and limits on government subsidies to businesses.
They are seeking an agreement to govern their trading relationship once the UK’s post-Brexit transition period ends in December.
In the draft summit “conclusions” document, the EU expresses “concern” that not enough progress has been made in key areas for a deal to be reached.
It adds that the EU will “step up their work” for all possible outcomes, including the possibility a deal is not reached before December’s deadline.
Downing Street said the UK’s chief negotiator Lord Frost has returned to London and updated Mr Johnson on the “state of play”.
‘Lot of work’
On Wednesday, a No 10 spokesman said fishing rights remained the “starkest” point of difference between both sides.
“The prime minister said that he looked forward to hearing the outcome of the European Council and would reflect before setting out the UK’s next steps.”
Backbench Conservative Peter Bone told MPs Lord Frost was briefing the prime minister “on whether to continue the negotiations or whether to call it a day and prepare for a no-trade deal Brexit”.
Speaking after her call with the prime minister on Wednesday, Mrs von der Leyen said: “The EU is working on a deal, but not at any price.”
She added that “conditions must be right” on fishing, post-Brexit competition rules and how a deal is enforced for the EU to sign an agreement.
She added: “Still a lot of work ahead of us.”
EU leaders are not yet all on the same page when it comes to how much they should give up or give in to get a deal.
Brussels keeps calling on the UK to make concessions but a successful outcome will require compromises on both sides.
Will France’s Emmanuel Macron relinquish his hard-line position about keeping current fishing quotas in UK waters? He’ll have to, to get a UK deal.
Will Germany’s Angela Merkel give way on some demands on competition regulations (aka the level playing field) yet still grant the UK zero tariff, zero quota access to the single market?
EU leaders must agree all this amongst themselves and it won’t be straightforward.
Why does 15 October matter?
Over the summer, both the UK and EU seemed to agree the end of October was the final date to get a deal done – allowing enough time for it to be ratified before 31 December.
But come 7 September, Boris Johnson decided to shorten the deadline.
He said if a deal wasn’t reached by 15 October, “then I do not see that there will be a free trade agreement between us, and we should both accept that and move on”.
Thursday is that day – but Downing Street appears to have moved back from it as a hard deadline.
Formal negotiations ended at the start of October, but Mr Johnson and Mrs von der Leyen pledged to “intensify talks” over the coming weeks.
Pressed on whether the UK would walk away on 15 October, the government’s chief negotiator Lord Frost said it was his job to “advise the prime minister” on whether a deal was on the cards by then.
Speaking on Tuesday, France’s foreign minister Jean-Yves Le Drian suggested EU leaders do not see this week as a hard deadline for a breakthrough.
“The date of 15 October, it’s Prime Minister Boris Johnson who announced that, it is not the position of the European Council,” he told French MPs.
He added that “everything should be played out” between October 15 and “mid-November”.
He warned that the prospect of no deal was “unfortunately very likely,” but the EU was “prepared for all eventualities”.
Transition deadline looms
By remaining in the bloc’s single market and customs union, the UK has continued to follow EU trading rules during its post-Brexit transition period.
This 11-month period is due to end in December, and the UK has ruled out seeking an extension.
Formal talks began in March and continued throughout the pandemic, initially via video link before in-person discussions resumed over the summer.
If a deal is not done, the UK will trade with the EU according to the default rules set by the World Trade Organization.