The European Union’s chief negotiator has signalled that post-Brexit trade talks will continue if tonight’s deadline passes without an agreement, saying they had reached a “crucial moment”.  

But Michel Barnier did little to raise UK hopes the EU would significantly shift its position in the coming hours, amid fears Britain is heading for a damaging no-deal Brexit.  

Earlier health secretary Matt Hancock accused the bloc of making unreasonable demands to secure an agreement.  

But both men also suggested that talks would continue beyond the supposed deadline of midnight tonight.  

MEPs had said that both sides had until Sunday to strike a deal.

But that deadline, like so many before, appeared to be extended when an extraordinary session at the European Parliament was scheduled to allow MEPs to debate any agreement on 28 December.  

Mr Barnier said the negotiations were at a “crucial moment”.  

In what will be seen as a pointed comment, however, he wrote in a tweet that while the EU “remains committed to a fair, reciprocal & balanced agreement. We respect the sovereignty of the UK. And we expect the same”.

Britain has complained that the EU’s position, especially on issues like fishing, do not respect the UK’s sovereignty. It has warned the talks will fail unless the EU’s position alters drastically.  

Over the weekend UK sources said it was looking increasingly likely that the transition period would end on 31 December without a deal, an outcome economists have warned would be disastrous.  

A government source said: “Unfortunately, the EU are still struggling to get the flexibility needed from member states and are continuing to make demands that are incompatible with our independence.

“We cannot accept a deal that doesn’t leave us in control of our own laws or waters.”

Shadow foreign secretary Lisa Nandy said Labour would probably support a Brexit deal but called on the government to “get its act together”.

“We’d be minded to back it but we don’t know what will be in it. We want to see that deal first,” she said on Sky’s Sophy Ridge On Sunday programme.

“We don’t trust that the prime minister will come back with a deal that’s in the national interest, but we’ve always said that we think a deal is absolutely essential and no deal would be a disaster.

“What we hope is that the government gets its act together in these last 11 days and make sure there is a deal – making sure people aren’t waking up on 1 January in the middle of a global pandemic with all of the chaos a no-deal Brexit would bring.”