Brexit trade talks between the UK and the EU have been put on hold after the two sides said "conditions for an agreement are not met".
The bloc's chief negotiator Michel Barnier said he and Downing Street's David Frost had agreed to "pause" talks on a deal while they brief their principals on the state of play of the negotiations.
In a joint statement, Lord Frost and Mr Barnier said European Commission President Ursula von der Leyen and Prime Minister Boris Johnson would "discuss the state of play" on Saturday afternoon.
They blamed the pause on "significant divergences on level playing field, governance, and fisheries".
The level playing field refers to the issue of state subsidies and standards.
The EU fears that Britain will cut social and environmental standards and heavily subsidise its industries, making it a low-regulation economic rival.
Britain, where Brexit was promoted as "taking back control" from Brussels, wants the freedom to set its future economic policies.
The fishing industry is another obstacle to a deal - it is a small part of the European economy but is very important to nations such as France.
The EU wants to continue to fish in British waters but Britain wants to control their access and quotas.
It comes after a week of intense negotiations in London, with late night sessions fuelled by deliveries of sandwiches and pizza.
There had been contradictory reports of how the talks were progressing, with some EU officials saying an agreement was near and British officials warning that the talks were in a "difficult phase".
Sky's deputy political correspondent Sam Coates said the pause was "no doubt a very significant moment" but "not unexpected".
"Things didn't go terribly well on Thursday in the negotiating room and (on Friday) they didn't get markedly worse but on the issues we've talked about for the last 12 months, there isn't the gap being closed."
He said there was the possibility that the call between Mr Johnson and Ms von der Leyen could produce "a bit of a breakthrough" but "while it is possible at the end of that call, both sides could agree there are no more talks necessary, I'm told that is the least likely outcome".
Britain formally left the 27-nation bloc at the end of January but had been in a transition period since then, with rules on trade, travel and business remaining unchanged.
But from the beginning of next year, it will be treated by the EU as a third country, and the absence of a trade deal would bring tariffs and trade barriers with huge disruption for both sides.
Any deal must be approved by politicians in Britain and the EU before the end of the year to take effect on 1 January.
European Council President Charles Michel said: "We will see what will happen in the next days.
"But the end of December is the end of December and we know that after 31 December we have 1 January, and we know that we need to have clarity as soon as possible."
https://news.google.com/__i/rss/rd/articles/CBMib2h0dHBzOi8vbmV3cy5za3kuY29tL3N0b3J5L2JyZXhpdC10cmFkZS10YWxrcy1wdXQtb24taG9sZC1hcy11ay1hbmQtZXUtc2F5LWNvbmRpdGlvbnMtbm90LW1ldC1mb3ItZGVhbC0xMjE1MTIzMdIBc2h0dHBzOi8vbmV3cy5za3kuY29tL3N0b3J5L2FtcC9icmV4aXQtdHJhZGUtdGFsa3MtcHV0LW9uLWhvbGQtYXMtdWstYW5kLWV1LXNheS1jb25kaXRpb25zLW5vdC1tZXQtZm9yLWRlYWwtMTIxNTEyMzE?oc=5
2020-12-04 19:41:15Z
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