EU sets Dec deadline

EU President Donald Tusk yesterday warned that the bloc may rethink whether a Brexit deal is possible if there is no progress towards trade talks by December as hoped.

With the two sides exchanging barbs about who is to blame about the sluggish pace of the negotiations, EU chief negotiator Michel Barnier separately reminded London that "Brexit is not a game".

Former Polish premier Tusk appeared to dash London's hopes that EU leaders will use a summit on October 19 to agree to move on from divorce talks to the next phase of negotiations, dealing with a future relationship.

He insisted that Brussels was still working towards a deal, despite British Prime Minister Theresa May saying her government is making preparations in case there is no accord when Britain leaves the EU in March 2019.

"We hear from London that the UK government is preparing for a 'no deal' scenario. I would like to say very clearly that the EU is not working on such a scenario," Tusk told the EU Committee of the Regions in Brussels.

"We are negotiating in good faith, and we still hope that the so-called 'sufficient progress' will be possible by December," he added.

May told the EU on Monday that the "ball is in their court" after she unveiled a range of Brexit compromises in a speech in Florence in September, and called for a two-year transition period.

Britain also on Monday outlined proposals for new laws to set tariffs and quotas including if Britain leaves the European Union with no agreement in place, as it prepares for a post-Brexit customs system.

Britain and the EU are this week holding a fifth round of Brexit divorce negotiations, the last before next week's EU summit to decide on whether there is "sufficient progress" in the talks.