Talks on a new Brexit deal have entered a potentially decisive last phase, as officials from the EU and the UK appear to be closing in on a last-ditch agreement that could avert the UK’s messy cliff-edge exit on 31 October.

Negotiators have been given the green light for talks to enter the so-called ‘tunnel’ phase – diplomatic jargon for talks continuing in secret between a small group of negotiators in complete secrecy – with a view to presenting a deal ahead of the EU summit on 17 and 18 October.

The talks had appeared to be on the verge of collapse earlier this week after the UK government briefed that brokering a deal was ‘essentially impossible’, but were surprisingly revived following three hours of talks between UK premier Boris Johnson and Irish Taoiseach Leo Varadkar on Thursday.

The EU’s chief Brexit negotiator, Michel Barnier, sounded a philosophical note on Friday, telling reporters that “Brexit is like climbing a mountain. You need vigilance, determination and patience,” following his meeting with the UK’s Brexit Secretary Stephen Barclay.

The UK is due to formally leave the EU on 31 October and Johnson has repeatedly promised that country will leave the bloc with or without a deal.

Just two days before Thursday’s breakthrough, Johnson’s advisors said that brokering a compromise was “essentially impossible” following a difficult meeting with German Chancellor Angela Merkel.

The optimistic mood music has encouraged the financial markets, with the pound sterling hitting its highest level against the euro and dollar in six months.

However, there is still no clarity on what concessions have been or are likely to be made, and public statements suggest that long-standing differences remain unchanged.

Following the meetings on Friday, the European Commission reiterated its position, stating that “there must be a legally operative solution in the Withdrawal Agreement that avoids a hard border on the island of Ireland, protects the all-island economy and the Good Friday (Belfast) Agreement in all its dimensions, and safeguards the integrity of the Single Market.”

Barnier was expected to brief the European Parliament’s Brexit Steering group on progress on Friday afternoon.

“The UK has still not come forward with a workable, realistic proposal,” said European Council President Donald Tusk on Friday, though he added that he had received “promising signals” from Varadkar.

Whatever the outcome of the ‘tunnel’ talks and next week’s summit, UK lawmakers will be recalled on October 19, a Saturday, for an emergency parliamentary session.

That would see a vote on any deal Johnson manages to bring back from Brussels, while pro-Remain MPs could also try to attach a confirmatory referendum on to any deal he secures.

If no deal is obtained next week, the sitting would also mark a crunch decision on whether Johnson agrees to request a three-month extension to the Article 50 process or is forced to resign.

[Edited by Zoran Radosavljevic]