The UK and EU have agreed to carry on post-Brexit trade talks after a call between leaders earlier on Sunday.
In a joint statement, Boris Johnson and European Commission President Ursula von der Leyen said it was "responsible at this point to go the extra mile".
The pair discussed "major unresolved topics" during their call.
The two sides had said Sunday was the deadline for a decision on whether to continue with talks, with the UK set leave EU rules at the end of the month.
But they agreed to tell negotiators to carry on talks in Brussels "to see whether an agreement can even at this late stage be reached".
They did not set say how long these talks would continue, but the ultimate deadline is 31 December, and time must be allowed for the UK and European Parliament to vote on any deal that emerges.
Mrs von der Leyen said Sunday's call with Mr Johnson had been "constructive and useful".
But Mr Johnson repeated his warning from earlier in the week that a no deal scenario was "most likely".
The UK and EU have been carrying out negotiations for a post-Brexit trade deal since March and are attempting to secure one before the so-called transition period end on 31 December - when the two sides would move to trading on World Trade Organization (WTO) rules.
Without a trade deal, tariffs - charges on goods being bought and sold between the two sides - could be introduced and, in turn, prices on certain products may go up.
There are two key sticking points preventing an agreement - competition rules and fishing rights - and negotiators will now continue to sort these issues out.
Speaking from the Commission in Brussels, Mrs von der Leyen read out a joint statement, saying: "Despite the exhaustion after almost a year of negotiations, despite the fact that deadlines have been missed over and over, we think it is responsible at this point to go the extra mile."
Mr Johnson later said "where there is life, there is hope", and that the UK "certainly won't be walking away from the talks.
But he added: "I've got to repeat the most likely thing now is of course that we have to get ready for WTO terms.
"As far as I can see, there are some serious and very difficult issues that currently separate the UK from EU and the best thing to do now for everybody… [is to] get ready to trade on WTO terms."
Labour called on the government "deliver on the promise" of securing a deal to "allow us to move on as a country".
The basics
- Brexit happened but rules didn't change at once: The UK left the European Union on 31 January 2020, but leaders needed time to negotiate a deal for life afterwards - they got 11 months.
- Talks are happening: The UK and the EU have until 31 December 2020 to agree a trade deal as well as other things, such as fishing rights.
- If there is no deal: Border checks and taxes will be introduced for goods travelling between the UK and the EU. But deal or no deal, we will still see changes.
Talks will now continue, with a focus expected on how close the UK should stick to EU economic rules in the future.
The EU is determined to prevent the UK from gaining what it sees as an unfair advantage of having tariff-free access to its markets - not paying taxes on goods being bought and sold - while setting its own standards on products, employment rights and business subsidies.
The EU is reported to have dropped the idea of a formal mechanism to ensure both sides keep up with each other's standards and is now prepared to accept UK divergence - provided there are safeguards to prevent unfair competition.
Fishing rights is another major area of disagreement, with the EU warning that without access to UK waters for EU fleets, UK fishermen will no longer get special access to EU markets to sell their goods.
But the UK argues that what goes on in its own waters, and its wider business rules, should be under its control as a sovereign country.
Business lobby group the CBI said the continuation of talks "gives us hope", and that a deal was "both essential and possible" for the UK economy.
The group's director general, Tony Danker, said: "Ongoing delays are frustrating and cost businesses. But it is vital to make use of the time.
"Government must move with even more determination to avoid the looming cliff edge of 1 January."
Trade talks soldier on. We've got used to missed deadlines, but this really is going to the wire.
The language from the leaders seems a lot less pessimistic than we heard in the last few days.
Warnings no deal looked the most likely outcome have been replaced by constructive talks and being prepared to "go the extra mile".
Neither side wants to throw the towel in yet. And there's no new deadline, which suggests there could be a few days of talks left.
But the big question is this - has anything happened that means the sides are closer to a deal?
Or has anyone given a nod or a wink that they're prepared to compromise to move?
We'll find out soon enough.
https://news.google.com/__i/rss/rd/articles/CBMiL2h0dHBzOi8vd3d3LmJiYy5jby51ay9uZXdzL3VrLXBvbGl0aWNzLTU1MjkyODkw0gEzaHR0cHM6Ly93d3cuYmJjLmNvLnVrL25ld3MvYW1wL3VrLXBvbGl0aWNzLTU1MjkyODkw?oc=5
2020-12-13 12:50:00Z
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