Theresa May has been accused of reneging on a deal over the Northern Ireland border that would have helped push Brexit talks on to trade.
Irish Prime Minister Leo Varadkar said he was “disappointed and surprised” to hear the UK had backed down from a draft agreement on the crucial subject reached earlier in the day.
:: As it happened – No Brexit deal but progress made
He refused to say whether the Democratic Union Party (DUP) was responsible for any backtrack, but cautioned people should remember it “doesn’t speak for the majority of people in Northern Ireland”.
The Taoiseach added there was “still time” to reach an agreement before the EU Council summit on 14 December.
But he called the wording on a border deal a “compromise”, saying: “I don’t see any reason to change the text at this point.”
The intervention came after a call from Mrs May to Arlene Foster, following the DUP leader’s assertion she would “not accept any form of regulatory divergence”.
Mrs May will travel back to Brussels later this week for more talks with EU officials after failing to secure a deal with the bloc’s Commissioner and President of the European Council.
The EU had set 4 December as a deadline for an agreement to be reached to move negotiations on to their second phase next week.
Speaking at a press conference on Monday afternoon, Mrs May said she had a “constructive meeting” with Jean-Claude Juncker and that “a lot of progress has been made”.
But she added: “On a couple of issues some differences do remain which require further negotiation and consultation and those will continue.
“We will reconvene before the end of the week and I am also confident that we will conclude this positively.”
Mr Juncker had announced immediately before that “it was not possible to reach a complete agreement today”.
He called the PM “a tough negotiator – not an easy one”.
Sky’s Ireland Correspondent David Blevins described the “crisis” phone call between Mrs May and Mrs Foster as having “only one conclusion”.
“This intervention by the DUP, the party shoring up Theresa May’s minority government, put paid to any agreement today.
He said it would be “extraordinary” if the DUP leader did not know what Mrs May was going to present in Brussels, adding: “The confidence and supply arrangement is now at the heart of this Brexit negotiating progress.”
A Government source told Sky News it was “foolish to pretend there isn’t an issue with the DUP – but it is not the only issue”.
They said the issue of the European Court of Justice jurisdiction over EU citizens’ rights was also “not locked down”, adding: “It would have been easy to sign a piece of paper today but that piece of paper did not represent our position.”