(Bloomberg) -- The U.K. can't accept any Brexit offer from the European Union that treats Northern Ireland as a separate customs territory, an official in Prime Minister Theresa May's office said.
The comment, given on condition of anonymity, came after Irish broadcaster RTE reported the EU will suggest an “Irish backstop” or fallback plan that would see Northern Ireland stay inside the bloc's customs union and single market in the event the U.K. and EU can't agree a broader trade agreement.
May has repeatedly said no British prime minister could agree to a proposal that split up the U.K., and Brexit talks have stalled on the issue for months.
Read more: U.K. and EU Aim to Break Brexit Deadlock as Time Runs Out
The EU is suggesting checks would need to be carried out at British and Northern Irish ports only on live animals, animal-derived goods and food products moving from Great Britain to Northern Ireland, RTE reported on Wednesday. Other checks could be done away from ports, it said.
Earlier, the pound fell as much as 0.4 percent against the dollar after the Times newspaper reported May was set to reject what it called an “improved” offer from EU negotiator Michel Barnier. The newspaper cited a person it didn't identify as saying they'd seen no evidence Barnier had moved his position on having a customs border in the Irish Sea.
Read more: Brexit and the Path to a Deal: Here's What to Expect in Salzburg
Ahead of an EU summit in Salzburg beginning Wednesday, both sides had signaled their readiness to work to break the deadlock on the Irish border and the backstop plan, with Barnier telling reporters in Brussels the EU is “ready to improve” its proposal. A senior U.K. official said May will hammer home her message that carving off Northern Ireland will never be an option, but that she's committed to reaching an agreement if better terms are proposed.
EU diplomats have said the bloc is gambling on May making concessions on the Irish border after what could be a contentious Conservative Party annual conference ending Oct. 3, paving the way for a Brexit deal in November.
To contact the reporters on this story: Robert Hutton in London at rhutton1@bloomberg.net;Dara Doyle in Dublin at ddoyle1@bloomberg.net
To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Stuart Biggs, David Merritt
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