Deadlock ahead of crucial vote on PM's deal in the British Parliament

Eleventh-hour talks between the United Kingdom and European Union aimed at finding a solution to the Brexit impasse appeared to grind to a halt on Sunday, with the prime minister's office saying they were "deadlocked", before they stumbled on into Monday.

Negotiators are seeking a fix for the so-called Irish backstop issue ahead of a crucial vote in the British Parliament on Tuesday that could lead to the UK crashing out of the EU without a post-separation trading relationship, something British business lobbyists have said would be disastrous.

Prime Minister Theresa May and Jean-Claude Juncker, president of the European Commission, talked by phone on Sunday evening and again on Monday, but, as of Monday afternoon, a face-to-face meeting, during which they could sign off on a compromise deal solving the backstop issue, had not happened. The EU recalled its ambassadors on Monday to brief them about the situation.

The UK and EU want to avoid a hard border between the Irish Republic and Northern Ireland after the UK leaves the EU but cannot agree how to do it. The old hard border was a flashpoint for paramilitary groups that disagreed over whether Northern Ireland should be part of the UK or part of a united Ireland.

The EU says a hard border can be avoided by the UK remaining a member of the EU customs union until a free-trade deal can be agreed but many British MPs fear that would bind the UK to EU rules indefinitely.

Former foreign secretary Boris Johnson, a proponent of the UK leaving the EU, wrote in the Daily Telegraph there is "no way" he will support May's exit deal without a solution to the Irish backstop issue.

"The UK will have less sovereign power to withdraw from the backstop than it has to leave the EU itself," he wrote. "It is quite a bewildering state of affairs."

And the BBC quoted Mark Francois, another prominent Brexiteer, as saying MPs will defeat May's proposed deal on Tuesday, unless "something amazing" materializes on Monday.

The Guardian newspaper added that senior members of the ruling Conservative Party were so worried about May suffering another heavy defeat, and possibly a leadership challenge, that they urged her to push back Tuesday's vote but the BBC said on Monday afternoon the government was insisting it would go ahead.

If May holds Tuesday's vote and loses, MPs are likely to ask the EU for an extension to the March 29 deadline by which the UK must leave the EU.

The Bank of England, meanwhile, has told UK lenders to triple their holdings of easy-to-sell assets so they can deal with turbulence in the financial sector if the UK crashes out of the EU without a separation deal.