The tough talk came as the negotiators scramble to secure a pact before December 31
Negotiations for a post-Brexit trade deal were deadlocked and threatened by failure on Sunday, as both sides dug in their heels over access to the UK's rich fishing waters.
The European Parliament had fixed Sunday as the last moment it could accept a text of any accord if MEPs are to ratify it before Britain leaves the EU single market in two weeks.
But both sides of the intense negotiations in Brussels now expect the talks to blow past what is only the latest in a series of missed deadlines, and both insist that the other must back down over fish.
Without a deal, Britain's participation in the European project would end with a new cross-Channel tariff barrier to sharpen the shock of unravelling a half-century of ever deeper political and economic partnership.
"We're continuing to try every possible path to an agreement, but without a substantial shift from the (European) Commission we will be leaving on WTO terms on 31 December," a British government source said.
But a European diplomat had told AFP that Brussels had made its best offer and it was down now to UK Prime Minister Boris Johnson -- now distracted by a worsening coronavirus crisis at home -- to decide whether he wants a deal.
"It could well continue over Christmas, now the UK is still making up its mind whether it is willing to pay the price for unprecedented access to the internal market," he said
"The EU has been clear this weekend that it is willing to compromise on fish. But it will bail at putting EU fishermen structurally out of business. The narrow path to a deal has now become a single goat track, about to peter out."
The tough talk came as the negotiators scramble to secure a pact before December 31. No deal would risk chaos at EU and UK borders, where a pre-deadline rush of freight trucks has already caused long tailbacks.
Britain intends to assume control over its waters on January 1, but is ready to allow continued access to EU fishing fleets for a transitional period under new terms.
UK negotiator David Frost wants Britain to take back more than half the fish currently assigned under the EU quota system, under a three-year agreement.
The European side insists the UK can not have tariff-free access to the EU single market as a whole unless it agrees to take back only a quarter of the fish quota -- and that the transitional period would last seven years.
Fishermen 'sold down the river'
The issue is highly charged for both Britain and EU members with northern fishing fleets like France, the Netherlands, Belgium and Denmark, and diplomatic sources admit the whole trade package could collapse.
"We cannot accept a deal that doesn't leave us in control of our own laws or waters," the UK government source said, arguing that the EU was "continuing to make demands that are incompatible with our independence."
EU fishermen fear losing any access to the rich UK fishing waters will threaten their livelihoods.
"We are in the throes of being sold down the river," the European Fisheries Alliance said in a statement, urging EU negotiator Michel Barnier to stick by them.
Time is very short to reach an accord.
The European Parliament had highlighted a deadline of 2300 GMT on Sunday to receive a deal for review if MEPs are to ratify it before the end of the year.
Their UK parliamentary counterparts are in recess, but can be recalled within 48 hours to do likewise.
But EU capitals have not acknowledged any deadline -- and officials say they could provisionally ratify the agreement to avoid the economic shock of a no-deal divorce.