UK, EU close to deal over Irish border

Britain would remain in a temporary customs union with the EU, avoiding a hard Irish border, as part of a new deal being thrashed out between London and Brussels, according to a Sunday Times report.

Senior sources told the newspaper that Prime Minister Theresa May has secured concessions from Brussels, with the EU agreeing to write an "all-UK" customs union into the divorce deal.

This would avoid the EU's "backstop" solution that would have treated Northern Ireland differently from the rest of Britain.

There will also be an "exit clause" from the customs union in a bid to convince Brexiteers that it is not a permanent arrangement as May looks to secure enough votes to get the deal through parliament, it added.

Downing Street refused to confirm the report, telling AFP it was "all speculation", but that negotiations were "going well".

The Irish border has proved the biggest obstacle to a deal, with both sides vowing not to reinstate a hard border between Ireland and Northern Ireland for fear of destabilising the peace accord that ended decades of deadly sectarian violence.

Under the reported deal, the EU accepts that regulatory checks on goods can be carried out in factories and shops rather than at the border, the Sunday Times said.