EU leaders must intervene to break an impasse in key areas of the post-Brexit trade talks, government sources have said, as the Latvian prime minister declared that securing a "good" deal by the July deadline was now a "long shot".

Ministers believe that a "political injection" is needed from the heads of European governments in order to "move the negotiations forward", after David Frost, Britain's chief negotiator, said the bloc's demands on areas such as fishing and "level playing field" rules were unacceptable.

In an interview with The Telegraph, Krisjanis Karins, Latvia's prime minister, suggested it was now virtually "impossible" to get a good deal now before the final point at which the UK can seek an extension to the transition period, which is due to end on Dec 31.

He also warned that EU leaders were "preoccupied with Covid-19", stating: "We've talked about internal trade, we've talked about protective equipment, we've talked about everything. We simply are not able to turn to that issue."

No 10 has ruled out an extension to the transition period, despite large gaps remaining between the two sides. On Friday, following the second formal round of trade talks, Michael Barnier, the EU's chief negotiator, claimed that the UK did not "wish to commit seriously on a number of fundamental points".