EU's Barnier still hopes trade deal with Britain possible - sources

The European Union's Brexit negotiator told the bloc's 27 national envoys to Brussels that he still hoped a trade deal with Britain was possible, stressing that the coming days would be decisive, diplomatic sources with the bloc told Reuters.

Michel Barnier addressed the gathering on Wednesday and the three sources either participated in the discussion behind closed doors or were briefed on its content.

"Barnier still believes a deal is possible though the next days are key," said one of the EU diplomatic sources.

A second diplomat, asked what Barnier said on Wednesday and whether there was still a chance for a new agreement with the UK, said: "The hope is still there."

The first source said tentative concessions offered by the UK on fisheries - a key point of discord that has so far prevented agreement on a new EU-UK trade deal to kick in from 2021 - were "a glimmer of hope".

Reuters reported exclusively on Tuesday that Britain has moved to break the deadlock despite that fact that publicly London has been threatening to breach the terms of its earlier divorce deal with the bloc.

A third source, a senior EU diplomat, confirmed the UK offer but stressed it was not going far enough for the bloc to accept.

Brexit talks descended into fresh turmoil this month over Prime Minister Boris Johnson's plans to pass new domestic laws that would undercut London's earlier EU divorce deal, which is also aimed at protecting peace on the island of Ireland.

US Democratic presidential candidate Joe Biden warned Britain that it must honour the Northern Irish peace deal as it extracts itself from the EU or there would be no US trade deal for the United Kingdom.

The third EU source, who spoke under condition of anonymity, said that the bloc would take a more rigid line in demanding a solid dispute settlement mechanism in any new UK trade deal should Johnson press ahead with the Internal Market Bill.

"There is unease about what Britain is doing but Barnier has stressed he will keep negotiating until his last breath," said a fourth EU diplomat, highlighting the bloc's wariness about being assigned blame should the troubled process eventually fail.

Asked about an estimate by Societe Generale bank, which put at 80 percent the probability of the most damaging economic split at the end of the year without a new deal to carry forward trade and business ties between the EU and the UK, the person said:

"I would put it around the same mark."

Barnier is due to meet his UK counterpart, David Frost, around 1400 GMT in Brussels on Thursday.