By Gabriela Baczynska and John Chalmers
BRUSSELS (Reuters) - European Union negotiators have moved to "within millimetres" of the limits of their negotiating mandate at Brexit trade talks so it is up to London to compromise if a deal is to be reached, an EU diplomat said on Thursday.
Some EU envoys said earlier on Thursday that they were hopeful that a deal could be secured in days and a British minister reported "good progress".
But Prime Minister Boris Johnson's government pushed ahead with two bills that would breach the 2020 Brexit treaty despite protests from Brussels.
One EU envoy later said substantial differences remained at the talks. Johnson's spokesman said both sides were working hard to bridge the gaps.
Britain leaves the EU's orbit on Dec. 31, when a transition period of informal membership ends following its official departure last January, and the sides are trying to secure a deal to govern nearly $1 trillion in annual trade.
"We are not hours away from a deal, what we still need to agree is quite substantial," said the EU diplomat.
"We've reached a point where we are so close to the limits of our mandate that we need a movement on the side of the UK if we want to strike a deal."
Britain has repeatedly said it is up to the EU to compromise.
"Good progress is being made but we're going to do a deal that is right for Britain, if such a deal is available," British Education Secretary Gavin Williamson told Sky.
"If such a deal isn't available, then we're not going to sign up to something that is to our detriment."
Disagreements in three main areas - fisheries, economic fair play and settling disputes - have held up the talks for weeks, with each side blaming the other for the impasse.
CRUCIAL PERIOD
Failure to secure a deal would clog borders, worry financial markets and disrupt supply chains as the world tries to cope with the vast economic cost of the COVID-19 pandemic.
But France, Belgium and the Netherlands have said that failing to secure an agreement governing future trade relations with Britain would be less damaging than agreeing a deal on terms that are bad for the EU.
Several EU sources said the next 24-48 hours would be crucial to whether a new partnership deal can be agreed.
But in a move that could further undermine the trade talks, Britain's lower house of parliament is set next week to discuss legislation that would breach Britain's Brexit withdrawal treaty.
The Internal Market Bill - designed to protect trade between the four nations of the United Kingdom - prompted fury in the EU when it was first introduced because it unpicked the terms of the divorce agreement both sides signed in January.
Even if an agreement is reached at the trade talks - led by the EU's Michel Barnier and Britain's David Frost - the deal would still require the approval of the 27 national EU leaders as well as the European Parliament.
EU leaders are due to hold remote discussions on Dec. 10-11. They could either approve a deal or advance contingency plans to prepare for the impact of no deal being reached.