London will resume talks over a post-Brexit trade deal with the EU from Thursday - less than a week after threatening to walk away from negotiations.
Prime Minister Boris Johnson said discussions were "finished" unless there was a "fundamental change" in approach from Brussels.
"Clearly, significant differences remain between our positions on the most difficult subjects but we are ready with the EU, to see if it is possible to bring them closer during intensive discussions," said a spokesman for Johnson.
"It is quite possible that the negotiations will fail," the spokesman added.
Earlier, the EU's lead negotiator, Michel Barnier, said an EU-UK trade deal was within reach if both sides make the necessary compromises.
Barnier was speaking on Wednesday morning at the European Parliament. He also said Brussels is ready to start writing a legal text to seal the deal.
"An agreement is within reach if we are able to make progress in [the] next few days to resolve the sticking points. Time is running out each and every day," he told MEPs and the president of the European Council, Charles Michel.
Last week the UK told Barnier and his team not to come to London for more talks unless they had fundamentally changed their position on a number of issues.
Downing Street also wanted the EU to begin the process of putting a legal text in order as a way of intensifying progress.
Michel Barnier said the EU is ready to do this and was willing to do so before being told not to show up in London.
“We are ready to discuss all subjects on the basis of legal texts. My team was fully prepared to travel to London to work on that”, he said.
While the prospect of a successful outcome has risen significantly in recent weeks, the two sides are still relatively far apart on substantive issues like the so-called level playing field, governance and the aforementioned fisheries.
The UK is insisting that it wants a Canada-style trade agreement but Brussels has refuted this by pointing out that the current talks are about securing a zero tariff and zero quota deal. Something that Canada's deal does not contain.
Moreover, the EU says that the relationship between the EU and the UK including proximity and interdependence of economies is a vastly different relationship to the one with Canada.
Barnier warned that talks would fail unless the EU gets fair access to UK waters.
“There will not be a trade deal without a fair solution for fishermen on both sides and we will insist on this right up until the very end.”
“There needs to be mutual access to waters and a fair distribution of quotas for fishermen on both sides”, he said.
Ultimately though Barnier says the EU is willing to negotiate up until the moment possible.
“Our door will always remain open right up until the very end.”
In a more combative statement, European Council president Charles Michel refused to bow to British insistence for the EU to fundamentally change its negotiating stance and cede more to U.K. demands. Michel said instead that if Britain wants vast access to the 27-member bloc's markets, it will equally have to keep its waters open to EU fishermen, something the U.K. government has said it doesn't want to do.
In a combative display at the European Parliament, Michel said: “Yes, we want to keep access to U.K. waters for our fishermen. Exactly like you, too, want to keep access to our huge and diversified markets for your companies."