Furious May insists EU must respect UK's wishes
The threat of a chaotic no-deal Brexit soared as British Prime Minister Theresa May angrily accused the EU of creating an "impasse" in negotiations.
She said that EU proposals to keep Northern Ireland in the customs union after Brexit would destroy the integrity of the UK.
The prime minister's tone barely concealed her anger as she insisted Brussels must respect the UK and respond to her Chequers plan.
Mrs May was returning to the UK furious at her humiliating treatment by EU leaders at a summit in Salzburg.
"The EU should be clear: I will not overturn the result of the referendum. Nor will I break up my country.
"We need serious engagement on resolving the two big problems in the negotiations and we stand ready.
"In the meantime, we must and will continue the work of preparing ourselves for no deal."
Her speech dramatically ramped up the likelihood of a no-deal Brexit - sending the value of the pound falling - and European Council President Donald Tusk rapidly moved to offer an olive branch the embattled British Prime Minister.
Mr Tusk conceded Mrs May's Brexit proposal is a "step in the right direction" as negotiations threatened to reach a frosty impasse.
In a statement, the former Polish prime minister, who was criticised for goading Mrs May with social media posts during the EU summit, said he was a "true admirer" of the Conservative Party leader.
"After intensive consultations with member states, we decided that for the good of the negotiations, and out of respect for the efforts of PM May, we will treat the Chequers plan as a step in the right direction," Mr Tusk said.
"The UK stance presented just before and during the Salzburg meeting was surprisingly tough and in fact uncompromising. The response of the EU27 leaders was to reiterate our trust in chief negotiator Michel Barnier and to reiterate our position on the integrity of the single market and the Irish backstop.
"While understanding the logic of the negotiations, I remain convinced that a compromise, good for all, is still possible," he added.
However, it is unclear what form of compromise Mr Tusk was talking about. Sources in Dublin insisted nobody is contemplating changing the backstop, and that "the Border issue is solid". Another source said that even amid the threat of a no-deal scenario, Mrs May had herself acknowledged the need to avoid a hard Border.
The Tory Party conference is looming, and senior Irish sources told the Irish Independent they believe some of her rhetoric was designed to keep frustrated Brexiteers at bay.
"I think she's trying to steady the ship at home", said one.
A spokesman for Tánaiste Simon Coveney said the Government "welcomed" the fact that Mrs May reiterated the UK's commitment on the need to avoid a hard Border as well as the backstop.
Earlier, Taoiseach Leo Varadkar admitted negotiations are entering a "rocky patch" but he believes a deal between the UK and the EU can be reached.