The UK and European Commission have failed to reach an agreement over a Brexit trade deal.
President Ursula von der Leyen and Boris Johnson made a joint statement confirming no deal had been struck following an hour-long call.
The leaders instructed their negotiators to resume trade talks on Sunday in a last-ditch attempt to bridge the three ‘significant’ differences creating a roadblock to compromise.
The Prime Minister and commission chief are in the crucial final stages of negotiations over Brexit
The leaders were due to hold the emergency call today in an attempt to unblock talks on a post-Brexit trade deal.
Time is fast running out on efforts to reach a trade deal by the December 31 deadline.
The two leaders cited three ‘significant’ differences in position that are stalling the ongoing negotiations, as talks go down to the wire.
In a joint statement made Saturday in a televised address, she said the three ‘key issues’ concerned a level playing field, governance, and fisheries.
The statement issued by the leaders said: “In a phone call today on the ongoing negotiations between the European Union and the United Kingdom, we welcomed the fact that progress has been achieved in many areas.
“Nevertheless, significant differences remain on three critical issues: level playing field, governance, and fisheries.
“Both sides underlined that no agreement is feasible if these issues are not resolved.
“Whilst recognising the seriousness of these differences, we agreed that a further effort should be undertaken by our negotiating teams to assess whether they can be resolved.
“We are therefore instructing our chief negotiators to reconvene tomorrow in Brussels.
“We will speak again on Monday evening.”
EU Brexit negotiator Michel Barnier added that talks with his British counterpart David Frost scheduled for Sunday would show whether a new trade deal could be struck.
“We will see if there is a way forward. Work continues tomorrow,” Barnier said on Twitter.
Britain left the EU on January 31 but rules governing trade, travel and business have remained unchanged during a transition period which ends on December 31.
From that deadline, a new trade relationship will be established – with or without a deal.
If the divorce ends without a deal it will come with consequences at a time when Britain and Europe are grappling with the coronavirus second wave.
If no agreement is reached before December 31, the UK will move to World Trade Organisation rules, which will mean tariffs must be applied to EU imports and exports and quotas will be introduced.
British and EU negotiators paused trade talks on Friday to call in leaders to try to bridge their clashing positions.
Months of negotiations have failed to end in agreement as neither side will compromise over fisheries, ensuring fair competition guarantees and ways to solve future disputes.
Sources from both sides told the Reuters news agency that French demands over fishing rights in British waters remained a key issue.
On Friday, France’s Europe minister Charles Beaune publicly warned the French side will veto any agreement if they were not happy with the terms.
It is crunch-week for Brexit talks, as EU leaders are due to meet on Thursday for a two-day summit in Brussels.
It is due to be their last scheduled gathering of the year, and the pressure is mounting for an agreement for be ready for them to sign off that day.
Both Houses of Parliament in the UK and the European parliament must then ratify an agreement before the transition period expires on New Year’s Eve.
However matters are further complicated by last-minute wrangling in the UK.
The UK Government is bringing legislation back to the Commons for a vote by MPs on Monday on whether to overturn amendments by the House of Lords.
The amendments removed provisions relating to the Irish Border, overriding elements of Mr Johnson’s UK Internal Market Bill.