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A deal on the Irish border is not close, EU chief Brexit negotiator Michel Barnier warned today.

He issued the blunt assessment just hours before Theresa May was due to update the Cabinet on options to break the deadlock over a backstop to avoid a hard border between the Republic of Ireland and Northern Ireland.

He stressed his mandate was to work towards a deal and tell EU Council president Donald Tusk when one was “within grasp”, so Mr Tusk could decide whether to hold a summit to discuss it.

Mr Barnier told Belgian broadcaster RTBF: “For now, we are still negotiating and I am not, as I am speaking to you this morning, able to tell you that we are close to reaching an agreement, since there is still a real point of divergence on the way of guaranteeing peace in Ireland, that there are no borders in Ireland, while protecting the integrity of the single market.”

The British Government has persuaded Brussels and Ireland to consider a UK-wide backstop for the scenario where no other system has yet been found to avoid a hard border.

A key issue now is whether a backstop should be time-limited or permanent and how one could be terminated.

Ireland’s Taoiseach Leo Varadkar said yesterday that he was open to a “mechanism” to end such a backstop, rather than a specific date as being demanded by Brexiteers. However he ruled out the UK being able to trigger it unilaterally.

Frantic talks are ongoing to try to narrow the rift so the “divorce” settlement between the UK and the EU can be ag-reed at a summit later this month, and avoid a growing crisis which could force governments and firms to start implementing no-deal contingency plans.

But Mrs May is being warned by Tory and Democratic Unionist MPs not to accept any Brussels proposals that would see Northern Ireland treated differently from the rest of the UK as the country splinters away from the EU next March.

In Shanghai, International Trade Secretary Liam Fox said: “I spoke to the Prime Minister last night. For me, as a Conservative and Unionist, it’s unacceptable to have any one part of the United Kingdom treated differently from any other part.

“We joined the European Community as a United Kingdom, we will leave the European Union as a United Kingdom and there can be no pick-and-mix in terms of what is applicable to different parts of the UK.”

Mr Barnier also warned that even if a Brexit deal were sealed it would not be “business as usual”. He added: “There will be consequences for all companies because the United Kingdom has decided to leave the Union, the single market and the customs union as I speak, which means checks to protect European consumers and businesses.”

He stressed that the City was being offered a worse system of “equivalence” than the current “passporting” arrangements that allow it do business in the EU. “We want relations and co-operation... but we will do it on the basis of our system of equivalence,” he said.

“We have given equivalence to US and Japanese financial companies. It works very well. What works with the US should work with the UK. This equivalence, we give it but we can take it back if there is a risk to the financial stability of our continent. It’s that, no more, no less.”

A new poll of 20,000 people estimates Remain would win another in/out referendum by 54 per cent to 46. An an-alysis of the Survation poll for Channel 4 suggested 105 council areas that voted Leave in 2016 would now be carried by Remain.