Steve Barclay, Brexit secretary, will on Friday hold crunch talks in Brussels to establish whether the new optimism over a possible EU exit deal for the UK can be translated into detailed negotiations.
Mr Barclay will hold breakfast talks with Michel Barnier, EU chief Brexit negotiator, to see whether the “pathway to a deal” identified by Boris Johnson and Leo Varadkar, his Irish counterpart, can be turned into detailed legal text.
Mr Varadkar said he believed a deal could be agreed “by the end of October” but Mr Johnson wants to nail down an agreement before the European Council meeting that starts next Thursday.
Mr Barclay will discuss British proposals to break the deadlock, focused firstly on the issue of customs arrangements for Northern Ireland. A “consent” mechanism for the new arrangements is also on the table.
Details of the proposals have so far been closely guarded in London, Dublin and Brussels, but there is speculation in EU circles that Mr Johnson has made a significant move on the question of customs.
The prime minister has insisted Northern Ireland must remain inside the UK customs area. Speculation has focused on whether Mr Johnson could tolerate allowing the region to stay in the EU customs area for a temporary period, with the consent of the people.
Sterling was largely flat on Friday, gaining 0.1 per cent to $1.2451 in early London trading, its highest since September 25. The currency rallied 1.9 per cent on Thursday after the talks, its best day since March.
On Thursday, Julian Smith, Northern Ireland secretary, said that any consent given by the Northern Ireland assembly at Stormont could not amount to a DUP veto and would also have to reflect the support of the nationalist community. Mr Smith said there was now a “distinct possibility” of a deal.
Mr Barclay’s allies said he would also focus in his talks with Mr Barnier on the “deliverability” of any new deal at Westminster — in other words ensuring that it could win the backing of MPs in the House of Commons.
After their breakfast, Mr Barnier will brief the ambassadors of the EU27 member states on whether there is scope for progress. Details of the possible compromise could start to emerge later on Friday.