Dublin has signalled support for extending the UK's Brexit transition period in order to resolve the Irish border issues.
The country's deputy prime minister Simon Coveney reacted positively to reports that EU chief negotiator Michel Barnier was open to pushing the implementation period back a year to end in December 2021.
UK Government sources insisted Downing Street was not calling for an extension to transition arrangements; which is not an outright rejection.
The offer will enrage Brexiteers who will argue it would keep the UK effectively in the single market and customs union for at least another year with British taxpayers continue to pay over billions of pounds to EU coffers.
Plus, it would enrage UK fishermen as it would mean the country would not take back control of its waters until December 2021 at the earliest; more than five years after the 2016 EU vote.
Theresa May is preparing for what is likely to be a fractious Prime Minister's Questions in the Commons before she travels to Brussels for talks with Donald Tusk, the European Council President, and before she addressed EU leaders ahead of an EU27 dinner.
There are growing concerns the two sides will be unable to bridge the gap over the key issue of agreeing a "backstop" deal to ensure there will not be a return to a hard border in Ireland when the UK quits the EU.
Mr Coveney told BBC Radio 4's Today programme: "What Michel Barnier is now suggesting is, look, let's ensure that the backstop is never likely to be used by creating the space and time for the UK and the EU to be able to negotiate UK-wide customs arrangements that can ensure that there won't ever be the need for customs checks between Britain and Northern Ireland.
"We have always said that we are happy to show flexibility in terms of how we get to a destination where-by there is a backstop, or an insurance mechanism, in place to reassure people on the island of Ireland that they are not going to see the re-emergence of physical border infrastructure.
"And what Michel Barnier has indicated very clearly is that the EU side, certainly, is willing to allow more time in the transition period to agree an alternative solution to a backstop."
The EU meeting is the occasion when the leaders of the remaining 27 member states were supposed to give the green light for a special summit in November to finalise the terms of Britain's withdrawal.
But Mr Coveney made it clear that summit would not go ahead unless significant progress is made on the border issue.
He said: "What's more likely is that dates will be suggested, but that there won't be a commitment to a new summit unless there is a signal from the negotiating teams that there is something to sign off on.
"Both sides want to get a deal done here, and I think we need... to allow the negotiating teams to set the pace with a view to making recommendations, hopefully by mid-November, that a new summit is necessary to sign off on a final deal."
Mr Tusk has warned that without new "concrete proposals" from the British to break the logjam over the Irish border backstop, further progress on a deal may be impossible.
However, with her party split, and some Tory MPs openly calling for her to go, Mrs May has little room to manoeuvre if she is to secure a deal which stands any chance of getting through Parliament.
Ahead of her visit to Brussels, Mrs May was able to secure the backing of her Cabinet, at least for now, amid reports that some Brexiteer ministers were prepared to quit if she gave too much ground to Brussels.
However, there was anger among Tory Brexiteers after The Daily Telegraph reported that Chancellor Philip Hammond warned the meeting that the UK could still have to pay the EU up to £36 billion of the £39 billion "divorce bill" to settle its outstanding liabilities, in the event of a no-deal break.
The PM is also due to have bilateral meetings with European Commission president Jean-Claude Juncker, and Irish Taoiseach Leo Varadkar.
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