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Lord Frost, the head of the Prime Minister’s Task Force, met his Brussels counterpart Michel Barnier face-to-face in London yesterday in yet another attempt to break the deadlock in the wrangle over a post-Brexit UK-EU trade deal. But as the pair grappled over the agenda for next round of formal talks, the Prime Minister’s spokesman admitted a UK-EU trade deal “will not be easy to achieve” because of the bloc’s intransigence.

Negotiators from the European Union are digging in a row over rules for state subsidies to private firms and refusing to allow any other issues to be discussed, the spokesman added.

Lord Frost and Mr Barnier met last night to try to thrash out a framework for the eight round of formal trade negotiations due to be held in London from Monday.

Ahead of their meeting, the Prime Minister’s spokesman said: “An agreement is still possible and is our goal but it is clear it will not be easy to achieve.

“The EU is still insisting not only that we must accept continuity with EU state aid and fisheries policy but also that this must be agreed before any further work can be done in any other area of the negotiations including on legal texts making it very difficult to make progress.

“We will continue to work hard to reach agreement and look forward to the next round taking place next week.”

Mr Barnier’s tactics had left the negotiations stuck, the spokesman indicated.

The spokesman said: “The EU continues to insist that we must agree on difficult areas in the negotiations such as EU state aid before any further work can be done in any other area in the negotiation including on legal texts. That makes it very difficult to make progress.

“We would instead like to settle the simplest issues first in order to build momentum in the talks as time is short for both sides.”

“We will continue to work hard to reach agreement and look forward to the next round taking place next week.”

Mr Barnier’s tactics had left the negotiations stuck, the spokesman indicated.

The spokesman said: “The EU continues to insist that we must agree on difficult areas in the negotiations such as EU state aid before any further work can be done in any other area in the negotiation including on legal texts. That makes it very difficult to make progress.

“We would instead like to settle the simplest issues first in order to build momentum in the talks as time is short for both sides.”

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He insisted the Prime Minister will not allow Brussels to dictate the rules for the UK Government’s industrial policies, the spokesman added.

He added: “We’ll set out further detail of our domestic regime in due course. After the transition period, the UK will have its own regime of subsidy control and will not be subject to the EU’s state aid regime.

“We’ve been very clear about that throughout. The UK’s future subsidy arrangements are a matter for the British people and Parliament, not the EU.”

France’s Europe minister Clement Beaune was pessimistic yesterday about the chances of a trade deal.

He said: “Things are not progressing very well.

“The United Kingdom wants to leave the European Union and should therefore no longer have access to the European market.

“We cannot have access to the European market without respecting the sanitary, environmental rules of the community. No deal is a risk.”

In another sign of worsening tensions over Brexit, a German government minister said the EU should refuse any deal with the UK that failed to guarantee access to British coastal waters for European fishing vessels.

Addressing the European Parliament, Angela Merkel’s European affairs minister Michael Roth said: “We do understand that the UK wants certain advantages for its own fishermen, for its own fisheries industry.

“But, common resources need to be managed together in a sustainable way, which means we cannot accept that the UK would exclude EU fisheries efforts from its territorial waters all together.”

He added: “We fear we might be running out of time to some extent.

“No progress has been made for quite some time and we observe that the UK is now moving away from what we had agreed on a long time ago as the basis for the negotiations.

“Now that doesn’t mean the EU is changing its stance.”

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