By Guy Faulconbridge, Elizabeth Piper and John Chalmers

LONDON/BRUSSELS (Reuters) - The European Union accused Britain of playing a "stupid blame game" over Brexit on Tuesday after a Downing Street source said a deal was essentially impossible because German Chancellor Angela Merkel had made unacceptable demands.

With just 23 days before the United Kingdom is due to leave the bloc, the future of Brexit remains deeply uncertain as both London and Brussels position themselves to avoid blame for a delay or a disorderly no-deal Brexit.

In a sign that Johnson's last-ditch proposals to bridge the Brexit impasse have failed, a Downing Street source said Merkel and Johnson had had a frank exchange on Tuesday morning and she had made clear that a deal was "overwhelmingly unlikely".

The Downing Street source said that if Merkel's position on Northern Ireland remaining in the EU's customs union was the bloc's position, then a deal was impossible. The biggest hurdle to a deal remains the post-Brexit border arrangements between the British province of Northern Ireland and EU member Ireland.

"If this represents a new established position then it means a deal is essentially impossible not just now but ever," the Downing Street source said. Johnson insists Northern Ireland must leave the EU's customs union with the rest of the UK.

A spokesman for the German chancellor confirmed the call had taken place but declined to comment further.

However, Norbert Roettgen, a senior Merkel ally, said there was no new German position on Brexit. "Frankly a deal on the basis of Johnson’s proposals by Oct. 31 has been unrealistic from the beginning...," he said on Twitter.

Pressured by Brexit jitters, the pound fell 0.5% to $1.2226.

The EU was scathing about Johnson's stance.

"Boris Johnson, what's at stake is not winning some stupid blame game," European Council President Tusk said on Twitter. "At stake is the future of Europe and the UK as well as the security and interests of our people. You don’t want a deal, you don’t want an extension, you don’t want to revoke, quo vadis?"

Such abrupt remarks indicate the Brexit blame game has begun in earnest, and that now both London and EU capitals are preparing for an acrimonious and potentially chaotic Brexit for which neither side wants to be held responsible.

Johnson and his Irish counterpart Leo Varadkar reiterated their desire for a Brexit deal in a phone conversation on Tuesday evening and agreed to meet later this week, a Downing Street spokesperson said.

European Parliament President David Sassoli said after meeting Johnson on Tuesday there had been no progress in the Brexit talks.

"If his ideas are limited to what he presented to the negotiator (Michel) Barnier five days ago, it means that he doesn't actually want an agreement," Sassoli, an Italian, told reporters, speaking through a translator in London.

But on Tuesday evening Irish Foreign Minister Simon Coveney was more hopeful: "There is still a determination on the EU side to work to find a way of getting a deal but clearly the UK will need to move on some of the positions... outlined last week."

BREXIT BLAME GAME

A disorderly Brexit could rip apart the United Kingdom, endanger peace in Northern Ireland, hurt global growth and shape the future of the European Union, which was built on the ruins of World War Two.

An array of remarks by unidentified British sources laid bare just how far apart the two sides are after three years of tortuous haggling over the first departure of a sovereign state from the EU.

Brexit talks are now reaching a critical moment, a British spokesman said in Brussels, where Johnson's Brexit negotiator David Frost was in meetings with EU officials.

A separate Downing Street source told Reuters that unless the European Union compromises and does a Brexit deal shortly, then the United Kingdom will leave without a deal.

"We are leaving the European Union," the source said.

Arlene Foster, the leader of the Northern Irish Democratic Unionist Party that supports Johnson's government, accused the EU and Ireland of trying to trap the British province in a permanent customs union.

Ireland braced for the worst with a no-deal Brexit budget while Britain announced its no-deal tariff plan and updated its preparations for a no-deal exit - a nightmare scenario for many big businesses.

Johnson has consistently said the United Kingdom will leave the EU on Oct. 31 with or without a deal, though a law passed by parliament demands he write a letter to the EU asking for a delay if he cannot strike an exit deal by Oct. 19.

He has said he would abide by the law but Britain would leave the EU by the end of the month, without explaining that contradiction. He has also repeatedly demanded an election but parliament has refused to grant one.

Scotland's top court will rule on Wednesday whether to order Johnson to abide by the law forcing a delay and if it could sign a letter asking for an extension if he refuses to do so himself.

The Spectator magazine quoted an unidentified source in Downing Street as saying that Britain would take an aggressive stance towards the EU if Brexit talks break down, possibly even by withholding security cooperation.

"This government will not negotiate further so any delay would be totally pointless," the source was quoted as saying. "We'll either leave with no deal on 31 October or there will be an election and then we will leave with no deal."

(Writing by Guy Faulconbridge; additional reporting by William James and Gabriela Baczynska, editing by Michael Holden, Angus MacSwan and Gareth Jones)

#Bywire News #Uk News & Politics