European leaders on Thursday demanded Britain "make the necessary moves" to unblock stalled post-Brexit trade talks, putting the onus on British Prime Minister Boris Johnson to rescue a deal as time runs out.

The 27 bloc leaders arrived for a summit in Brussels expressing cautious optimism, but in their written conclusions urged the EU and its member states to step up preparations for a chaotic "no deal" exit.

"The European Council invites the Union's chief negotiator to continue negotiations in the coming weeks, and calls on the UK to make the necessary moves to make an agreement possible," the leaders said.

In response, a UK government spokesman reiterated Johnson's warning that he might yet walk away from the talks.

"As the PM made clear on his call with the EU presidents last night, he will reflect on the outcome of the European Council before setting out the UK's next steps," the spokesman said.

President Emmanuel Macron of France hinted at possible compromise on the thorny issue of fishing rights, saying he was open to finding a "good compromise" that would ensure access for French fishermen to UK waters.

The insistence of France and other northern fishing nations on maintaining access to British waters has been a key stumbling block in the talks so far. 

The European leaders have tried to keep Brexit off the agenda at their recent summits, trusting in EU negotiator Michel Barnier to defend their interests.

They agreed and published their conclusions on Thursday after only an hour of debate - though sources said the leaders continued their discussions with Barnier afterwards.

Johnson has warned that he could walk away from the negotiations unless the results of the latest two-day Brussels summit point to a breakthrough, but EU officials do not recognise his deadline.

The official statement offers little to Johnson, dropping a line in an earlier draft that called for Barnier to "intensify" his discussions with UK negotiator David Frost to seek a deal that could be ratified and implemented before Britain leaves the single market on December 31.

During the call to Johnson on the eve of the crunch talks, EU chief Ursula von der Leyen warned that there was "still a lot of work ahead of us", adding that Brussels wants a deal but "not at any price".

"The EU is united, we have a clear position, we want a good deal," von der Leyen said Thursday. 

In a dramatic twist, as the summit got under way she was forced to leave the venue and self-isolate after a member of her office tested positive for coronavirus.

'Approaching the runway'

On Wednesday, a Downing Street spokesman said that during the call, which also included summit host Charles Michel, Johnson had "expressed his disappointment that more progress had not been made over the past two weeks."

The British side has accused Brussels of trying to force concessions by running down the clock.

European diplomats say Brussels is still hoping for a deal, but is looking for a sign from Johnson that he is serious about compromise on the EU priorities.

"We need to lower the landing gear. We're approaching the runway. Is he thinking about landing or is he still at 10,000 metres?" one asked.

Diplomats said there had been some movement from Britain, but not enough to warrant locking the negotiators into a so-called "diplomatic tunnel" to force the talks over the finish line. 

Some member states are pushing for the sides to agree on a "toolbox" of retaliatory measures that Brussels or London could take if they feel that the other side has broken its word on maintaining a level playing field in cross-Channel business.

Britain left the European Union on January 31, but Barnier and Frost have been locked in inconclusive talks on a follow-on trade arrangement. 

If no deal is reached, trade rules will revert to the bare bones of World Trade Organization regulations.

Rules of fair competition

Both sides insist they are ready for this - and would prefer it to having to accept a bad deal - but experts forecast severe economic disruption.

Europe's three main concerns are agreeing on the rules of fair competition, how these rules will be policed and securing access to UK waters for EU fishing fleets.

Britain wants to reassert sovereignty over its waters and refuse EU legal oversight over the deal -- insisting it wants a simple trade deal of the kind the EU signed with Canada.

Brussels, in turn, stresses that Britain's economy is far more integrated with and closer to the EU's than Canada's, and that its single market must be protected from British backsliding.

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