LONDON • Britain's tortuous divorce from the European Union veered into fresh crisis yesterday after London threatened to undermine the exit deal unless free trade terms are agreed by next month.

In yet another twist to the four-year saga since Britain voted narrowly to quit the bloc, Prime Minister Boris Johnson's government is said to be planning new legislation to override parts of the Brexit withdrawal agreement that it signed in January.

That could jeopardise the whole treaty and create frictions in British-ruled Northern Ireland where special arrangements were made to avoid a hard border with Ireland to the south that could be detrimental to a peace agreement.

Sections of the proposed internal market Bill are expected to "eliminate the legal force of parts of the withdrawal agreement" in areas including state aid and Northern Ireland Customs, the Financial Times newspaper said, citing three people familiar with the plans.

EU diplomats were aghast, cautioning that such a step - leaked on the eve of new talks in London - would tarnish Britain's global prestige and heighten chances of a tumultuous final disentangling from the bloc on Dec 31.

The report was neither confirmed nor denied by Britain.

A government spokesman said it would work to resolve outstanding disagreements about Northern Ireland with the EU but was considering fall back options.

Mr Johnson and French President Emmanuel Macron, meanwhile, agreed yesterday that talks on a Brexit deal needed to make progress this month and reach a conclusion quickly.

"The Prime Minister and President Macron agreed on the importance of making progress this month and reaching a conclusion on talks quickly," a statement from Mr Johnson's office said, following a call between the two leaders.

Britain left the EU on Jan 31 but talks on a new trade deal before the end of a status-quo transition arrangement in December have snagged on state aid rules and fishing. London has set a deadline of Oct 15 to strike a deal.

"If we can't agree by then, then I do not see that there will be a free trade agreement between us, and we should both accept that and move on," Mr Johnson was to say yesterday, according to his office.

European diplomats said Britain was playing a game of Brexit chicken by threatening to collapse the process and challenging Brussels to blink first.

Some fear Mr Johnson may view a no-deal exit as useful distraction from the coronavirus crisis.

Without a deal, about US$900 billion (S$1.2 trillion) in annual trade between Britain and the EU could be thrown into uncertainty, including rules on everything from car parts and drugs to fruit and data.

Some Brexit-supporting members of the ruling Conservative Party oppose the withdrawal agreement, seeing it as threatening British independence even if the two sides secure future trade ties.

There was surprise and anger on both sides of the Irish border and in Brussels at the reported plan to undermine the withdrawal pact.

Leaders of Northern Ireland's Sinn Fein and SDLP parties, the region's two largest Irish nationalist groups, also criticised the government's reported plan.

British Environment Secretary George Eustice said the government was committed to implementing the withdrawal agreement but some legal ambiguities needed to be tidied up over the Northern Irish protocol.

And EU chief negotiator Michel Barnier said: "I remain worried... the negotiations are difficult, because the British want the best of both worlds." REUTERS

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