A potential breakthrough on Brexit has been threatened after the Democratic Unionists pledged to block any move that "separates" Northern Ireland from the rest of the UK.

Reports out of Brussels, where Theresa May has been lunching with Jean-Claude Juncker, the European Commission President, suggested the UK Government’s talks with the EU were on the brink of a breakthrough with a draft agreement talking of continued “regulatory alignment” between Northern Ireland and the Republic following withdrawal.

However, this means the post Brexit trading terms for Northern Ireland would be different from the rest of the UK’s, which prompted alarm in Unionist quarters and resulted in a call from Nicola Sturgeon that Scotland be given a similar separate deal to the one being offered to Northern Ireland.

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The First Minister tweeted: "If one part of UK can retain regulatory alignment with EU and effectively stay in the single market (which is the right solution for Northern Ireland) there is surely no good practical reason why others can't."

Nigel Farage, the Ukip MEP, also took to social media, saying: “This UK Government’s bitter betrayal of 17.4 million people today is a concession too far, for it will lead to endless problems in Scotland and it damages the integrity of the United Kingdom.”

In Brussels, Donald Tusk, the European Council President, said the EU and UK were "getting closer" to making the required "sufficient progress" for him to recommend at next week’s European Council that negotiations move on to trade and a transition period.

He tweeted: "Tell me why I like Mondays! Encouraged after my phone call with Taoiseach @campaignforleo on progress on #Brexit issue of Ireland. Getting closer to sufficient progress at December #EUCO."

Simon Coveney, Ireland’s Deputy Prime Minister, was also upbeat.

He said: “The indications we have is that we are in a much better place now than we have been in the negotiations to date. The legitimate concerns that Ireland has been raising for months are going to be addressed fully.

“These discussions are moving in the right direction. I hope we are in a place this evening where Irish people north and south will get reassurance from the wording that is very close to being finalised now."

Leo Varadkar, the Irish Taoiseach, who spoke to Mr Juncker minutes before the Commission chief sat down for lunch with Mrs May, had been due to make a statement on the developments on the steps of Government Buildings in Dublin at 2.30pm but his appearance was postponed at short notice, apparently due to the fact that talks in Brussels were continuing.

However in Belfast, Arlene Foster, the leader of the DUP, whose 10 MPs provide the Tories at Westminster with their working majority, expressed deep concern at the UK Government’s apparent offer on the Irish border.

She said: “We have been very clear: Northern Ireland must leave the European Union on the same terms as the rest of the United Kingdom and we will not accept any form of regulatory divergence which separate Northern Ireland economically or politically from the rest of the UK. And the economic and constitutional integrity of the United Kingdom must not be compromised in any way.

“Her Majesty’s Government understands the position of this party. The Prime Minister has told the House of Commons that there will be no border in the Irish Sea. And the Prime Minister has been clear that the UK is leaving the European Union as a whole, that the territorial and economic integrity of the United Kingdom will be protected.

“For our part, of course, we do want to see a sensible Brexit, a Brexit where the common travel area is continued, where we meet our financial obligations, where we have a strict, time-limited implementation period, and where the contribution of EU migrants to our economy is recognised in a practical manner.”

She added: “The Republic of Ireland Government for their part claim to be guarantors of the Belfast Agreement but they are clearly seeking to unilaterally change that Belfast Agreement without our input or our consent. And of course we will not stand for that.”

After she had finished her statement, Ms Foster did not answer a reporter's question about the status of the DUP’s confidence and supply deal with the Conservative Party.

David Trimble, former leader of the Ulster Unionists and onetime First Minister of Northern Ireland, said he was left "shocked" and "scratching his head" at reports of a deal allowing continued regulatory alignment across the border.

He told BBC Radio 4's World At One: "We need to see the detail of this. It's a thoroughly bad idea. If this operates purely on a Northern Ireland basis, it's going to put Northern Ireland businesses...potentially, at a very significant disadvantage because they would be locked into European regulatory provisions, whereas the rest of the United Kingdom, which is their major market, is free from those, and may have different regulatory provisions entirely."

Told that he sounded shocked by reports of a deal, Lord Trimble replied: "I am, yes. Because, potentially, this is very bad news for Northern Ireland, if it happens."

The Tory peer said he hoped that one side was giving a particular version of what was being agreed in order to try to influence events.

"I hope that there is still an opportunity for the Prime Minister to claw back from what is being said to the media at the moment."

Asked about how his colleagues in Parliament would react to such a deal, Lord Trimble added: "I am surprised and my colleagues in Parliament will be surprised too. I am hoping that the reality is somewhat different from what is being reported.

"If it is as has been suggested, then this is a very, very big issue indeed."

Meanwhile, Gavin Barwell, the No 10 Chief of Staff, is due this evening to address Tory MPs on the apparent agreement between London and Brussels.

If the breakthrough on phase two is confirmed, a joint UK-EU statement is expected later.