A no-deal Brexit is now the most likely outcome, EU leaders have been told as Boris Johnson hurtles towards a deadline this Sunday.
European Commission President Ursula von der Leyen issued the stark alert to the leaders of 27 nations as a Brussels summit ended today.
Ms von der Leyen told EU leaders “the probability of a no deal is higher than of a deal”, an EU official told Reuters.
It comes hours after Boris Johnson admitted no-deal was a “strong possibility” - in a move that would cause ports chaos and hike food prices from January 1.
In a press conference today, Ms von der Leyen admitted “positions remain apart on fundamental issues.”
She said the two sides would decide on Sunday "whether we have conditions for an agreement, or not".
She added: ”One way or the other, in less than three weeks, it will be new beginnings for old friends.”
Ms von der Leyen appeared to offer an olive branch on the issue of the ‘level playing field’, saying Britain will not have to follow every new EU law.
But she also made a threat, saying the EU would want to change Britain’s access to the single market on a case-by-case basis if it did decide to ignore Brussels’ rules.
UK officials fear that will see the EU “penalising” Britain with tariffs for not mirroring their rules and leave the UK with no control.
Talks are stuck on three issues - fishing, the ‘level playing field’ of sticking to EU rules, and how any deal is policed.
Ms von der Leyen told a press conference: “On the level playing field we have repeatedly made clear to our UK partners that the principle of fair competition is a pre-condition to privileged access to the EU market - the largest single market in the world.
“It is only fair that competitors to our own enterprises face the same conditions on our own market.
“But this is not to say that we would require the UK to follow us every time we decide to raise our level of ambition - for example in the environmental field.
“They would remain free, sovereign if you wish, to decide what they want to do.
“We would simply adapt the conditions for access to our market accordingly - the decision of the UK - and this would apply vice versa.”
On fishing she added: “The UK must understand the legitimate expectations of EU fishing fleets, built on decades and sometimes centuries of access.”
Mr Johnson said yesterday a no-deal would be “very good terms and we can prosper mightily in that future which is just around the corner”.
But his Culture Secretary Oliver Dowden was less upbeat today - admitting “if it comes to it, it will be choppy.”
Mr Dowden added: “We can survive and indeed thrive over the longer run.”
Mr Dowden said a deal is "90% of the way there" but that the Government will not accept an agreement at any price.
And he insisted ministers were not "taking people for a ride" by saying the UK would trade on "Australian-style" terms with Brussels if it failed to reach an agreement.
But ex-Aussie PM Malcolm Turnbull said an Aussie-style no deal would not be right for the UK, almost half of whose trade is with the EU.
The British Retail Consortium has warned supermarket food prices will rise in a no-deal as 80% of food imports are from the EU.
Under Britain's no-deal plan from January, 85% of foods imported from the EU would be subject to tariffs of more than 5%.
The average tariff would be more than 20%, including 48% on beef mince, 16% on cucumbers and 10% on lettuce.
Many non-food retailers would also face large tariff bills for EU-sourced products, including clothes and ceramics.
The Mirror understands Chancellor Rishi Sunak is working on a support package for British lamb farmers among others worst-hit.
But he is stopping short of an emergency budget or measures to support the entire economy beyond what's in place due to Covid.
