British Prime Minister Boris Johnson says it is time to "get ready" for the prospect of no free trade deal with the EU on 1 January, Sky News reports.
The prime minister claimed Brussels had "abandoned" the ambition but insisted "we always knew there would be changes" next year once the transition period ends "whatever type of relationship we had.''
Speaking from Downing Street after an EU summit which both sides said was the deadline for hammering out a trade deal, Mr Johnson said it looked like the country was heading for what he called "the Australian solution".
He suggested he is not completely walking away from negotiations, adding: "What we're saying to them is come here, come to us, if there's some fundamental change of approach."
The UK left the EU on January 31, this year.
After that the country entered a transition period, following many of the same rules meaning there was no change to trade and tariffs or things like freedom of movement.
Negotiators have since been trying to hammer out a trade deal to come into force when that runs out at the end of December.
But Johnson said in an intervention that "there doesn't seem to be any progress coming from Brussels.''
He told businesses and hauliers to "get ready" for there to be no free trade deal.
Instead he said the UK's relationship with the EU could be more like the one Brussels has with Australia, which will mean tariffs being introduced on goods between the UK and the 27 other EU countries.
And Johnson urged people to "embrace the alternative" with "high hearts", vowing the UK will "prosper mightily.''
Ursula von der Leyen, president of the EU Commission, said she would continue to work for a deal - "but not at any price".
"As planned, our negotiation team will go to London next week to intensify these negotiations," she added.
German Chancellor Angela Merkel also echoed a similar sentiment, saying: "As far as the EU is concerned, and as far as I am concerned, we should continue to negotiate."
And Charles Michel, head of the EU Council, said fisheries remains a "very important topic" in talks and insisted the UK should implement the divorce deal "in total,'' after Johnson threatend to override it.
The Union flag flies above a souvenir stand in front of Big Ben in London, Friday.
