A carefully choreographed attempt to showcase the progress of Brexit talks collapsed at the last minute on December 4 when the Northern Irish party which props up Prime Minister Theresa May's government vetoed a draft deal already agreed with Ireland.
"We are making progress but not yet fully there".
The bargain came as British Prime Minister Theresa May overcame dissent at home to find a compromise on the biggest challenges facing Britain during its split.
The long-awaited announcement also followed talks which continued into the early hours between the Prime Minister and Democratic Unionist Party, Arlene Foster.
Britain and Brussels had hoped that an offer to the Irish government to maintain "regulatory alignment" on both sides of what will be the new UK-EU land border would remove a key obstacle to the transition to talks on future trade terms.
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This covered the rights of European Union citizens living in the United Kingdom and UK citizens in the European Union; our financial settlement with the European Union; and ruling out a hard border between Northern Ireland and Ireland.
She said: "We will play a full part with the government in the second stage of the negotiations on a comprehensive trade deal".
European Commission President Jean-Claude Juncker said he planned to recommend that European leaders approve unlocking the next phase of talks when they meet at a summit next week.
Barnier informed European Union ambassadors that Downing Street had told him a potential solution was being worked out that could possibly satisfy both Northern Ireland's Democratic Unionist Party (DUP) and Ireland, but that it had yet to be signed off by any of those involved, the Guardian reported on Thursday.
"Companies all across the United Kingdom want absolute clarity on the long-term deal being sought, and want government to work closely with business experts to ensure that the details are right".
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DUP chief whip Sir Jeffrey Donaldson said: "Discussions are ongoing".
"Ireland supports Brexit negotiations moving to phase two now that we have secured assurances for all on the island of Ireland", he said.
She called the deal "a hard-won agreement in all our interests".
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"It is very, very important that whatever happens now, whatever we agree, has got to be consistent with taking back control of our laws, of our borders and of our cash", he said.
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