LONDON/DUBLIN (Reuters) - The United Kingdom could propose giving Northern Ireland joint UK and European Union status so it can trade freely with both, in an attempt to break the deadlock in Brexit negotiations, a government official said.

Parliament buildings at Stormont is seen at night in Belfast, Northern Ireland February 15, 2018. REUTERS/Clodagh Kilcoyne

The idea would be to create a 10-mile (16-km)-wide trade buffer zone along the border for local traders such as dairy farmers after the UK leaves the bloc, said the official, who spoke on condition of anonymity.

The plan is one of several being discussed and may not be proposed to the EU, the official said.

Inspiration for the dual-regulatory system has been taken from Liechtenstein, which is able to operate both the Swiss and the EU-linked European Economic Area regimes at the same time.

But a lawmaker from the Northern Irish party that supports Britain’s minority government dismissed the idea as at best contradictory and said it had not been raised with the party.

“These convoluted arrangements only arise because of the government’s failure to make it clear to the EU that regardless of EU negotiators’ attempts to keep us in the Customs Union and the Single Market, we are leaving,” Democratic Unionist Party MP Sammy Wilson said in a statement.

“Instead of moving from one set of half-cooked ideas to the other, it is now time for the government to put down its foot and make it clear to EU negotiators that the Prime Minister stands by her commitment that no deal is better than a bad deal.”

Martina Anderson, a member of the European Parliament for Sinn Fein, the main Irish nationalist party in Northern Ireland, said the proposal would not solve the border issues.

“Once again this shows the lack of knowledge of border areas and the concerns they face,” Anderson said. “The creation of a buffer zone would merely move the problem away from the border and hide a hard border in a buffer zone.”

DECADES OF VIOLENCE

EU diplomats and officials also voiced scepticism about the idea.

“We haven’t heard it from them. But it doesn’t seem like something that would work for us,” one official said.

EU negotiators have become, if anything, more convinced than they were when an Irish border “backstop” was first drafted six months ago that there is no real alternative to creating a separate economic regulatory system in Northern Ireland, aligned with the EU and therefore different from the British mainland.

But the devolved Scottish government voiced concern that the proposed arrangement would result in different treatment for Northern Ireland, and said that Westminster had previously ruled out a similar proposal it had put forward for Scotland.

“This apparent U-turn from the UK Government ... would leave Scottish businesses at significant economic disadvantage if they were implemented only in Northern Ireland,” said Mike Russell, Scotland’s Europe spokesman.

“The UK Government must urgently clarify its position and guarantee that Scotland will not lose out.”

Both the UK and the EU are committed to keeping a free flow of people and goods over the Irish border without returning to checkpoints -- symbols of the three decades of violence in the region largely ended by the Good Friday Agreement of 1998.

But finding a practical solution for any customs checks needed after Brexit is proving elusive.

The new proposal would create a special economic zone that would allow traders who constitute 90 percent of cross-border traffic to operate under the same rules as those south of the border, according to The Sun newspaper, which first reported that the idea was being considered.

John McGrane, the Director-General of the British Irish Chamber of Commerce, dismissed the proposal and said it was too late to be floating “vague, unworkable” ideas.

McGrane said his organisation was “aghast” that with time running out before Britain leaves the EU next year, the government has still not set out clearly how it can avoid imposing a land border on the island of Ireland.

The Department for Exiting the European Union declined to comment directly on the plans but confirmed that work was underway to refine post-Brexit customs options.

May previously pledged to take the UK out of the EU customs union by considering two options. One would be “max fac” in which the UK and EU would be entirely separate customs areas but would try to use technology to reduce friction and costs at the border.

The other option being considered is a customs partnership in which the UK would cooperate with the EU more closely and collect tariffs on its behalf with no requirement of declarations of goods crossing the border.