The move, first reported by the Financial Times, would row back parts of the UK’s agreement with the EU on state aid and customs arrangements for Northern Ireland. It is understood that the UK government believes the original protocol is drafted ambiguously enough to allow for a change of interpretation – a view likely to be fiercely contested by Brussels.
A government spokesperson said it was hopeful that a deal could still be reached. “As a responsible government, we are considering fall-back options in the event this is not achieved, to ensure the communities of Northern Ireland are protected.”
Key figures close to the negotiations have already warned that EU leaders and heads of state must intervene before the end of the month to save the talks from collapse.
On Monday, the prime minister will set a firm deadline of 15 October – the date of the European council – for a deal to be signed, with the mood bleak as formal talks resume this week between the UK’s lead negotiator, David Frost, and the EU’s Michel Barnier.
If no agreement is reached before the deadline, the UK will “move on” and accept that a deal cannot be struck, Johnson will say, adding that no deal would be a “good outcome”.
The prime minister will strike a belligerent tone, suggesting there will be no movement from the deadline and claiming the UK is ready to trade on World Trade Organization terms from January.
“There is no sense in thinking about timelines that go beyond that point,” he will say. “If we can’t agree by then, then I do not see that there will be a free trade agreement between us, and we should both accept that and move on.”
Johnson and his allies have repeatedly said they did not believe earlier negotiations made the threat of no deal tangible enough.
EU officials had previously said the deadline would be the end of October. Sources close to the talks have suggested fresh faces and interventions by member states are now needed to break the impasse after days of recriminations.
Raoul Ruparel, one of the leading advisers in Theresa May’s Brexit negotiating team, suggested the dynamics needed to change. “It is just Frost and Barnier and the same teams in talks; you’ve got two immovable objects sitting down again and you are not going to see great movement coming from that,” he said.
“There needs to be some change, some sort of fresh input, political input … If we come to the end of the year and we don’t have a deal between two close allies, that would look ridiculous, but with the two sides entrenched, where the mechanism is for unlocking the talks is not obvious.”
Johnson will characterise the result of no deal as a “a trading arrangement with the EU like Australia’s”, saying the UK would have full control of its laws and fishing waters and would “prosper mightily as a result”.
He will say the UK would find “sensible accommodations on practical issues such as flights, lorry transport, or scientific cooperation, if the EU wants to do that.”
Industry leaders have previously said no deal would spell disaster for the country, with tariffs imposed on goods sending costs for industry and consumers soaring.
Last week an LSE economics professor, Thomas Sampson, said no deal could cost more than the economic shock of Covid, causing a £3.3tn decline in the value of the UK’s output.
Johnson will say negotiators will continue to work hard to try to close a deal. “Even at this late stage, if the EU are ready to rethink their current positions and agree this, I will be delighted. But we cannot and will not compromise on the fundamentals of what it means to be an independent country to get it.”
There are worries that European leaders, preoccupied with the Covid-19 recovery plan and foreign policy crises in Belarus and the eastern Mediterranean, appear to have no appetite to intervene in Brexit talks for now.
There remain three stumbling blocks: state aid, fisheries and governance. The EU has protested that the UK is refusing to put forward proposals, while the UK is accusing Barnier of trying to force it to cut a deal on the “difficult” areas first and failing to engage on easier challenges such as fishing rights.
While some national capitals favour a tougher negotiating stance than the one being pursued by Barnier, they appear content to leave the talks in his hands, fuelling fears that there will be no deal if back channels are not created to test new ideas in confidence.
One UK government source said member state engagement had been minimal, but more direct approaches with EU leaders could be imminent.
“Our broad view has been that will come in the next few weeks,” the source said. “The nature of these negotiations is that bigger players will start to get involved when we reach the final stages.”
The foreign secretary, Dominic Raab, said on Sunday that the Brexit negotiations were approaching a “moment of reckoning” and that a deal was “there for the taking”.
UK officials are keen to start technical work on the bulk of the trade agreement on goods and services, for example on service schedules. “If we can’t start talking about legal texts this week, it is going to be difficult to get all the work done in the time available,” a UK official said.
A last-minute political intervention would be high-risk, say EU sources. “Ursula von der Leyen isn’t as interested in Brexit as [Jean-Claude] Juncker was,” the source said, referring to the European commission president and her predecessor. “You get the impression she just wants to move on and the same for any member states.”
Fears that talks were on the verge of collapse were heightened in the last 24 hours after Frost said the government was not “scared” of walking away.
His remarks in the Mail on Sunday led to recriminations, with May’s former chief of staff Gavin Barwell saying Frost had a “brass neck”.