Talks between the Government and Labour to break the Brexit logjam have been “productive” and will continue on Friday, Downing Street said.
Theresa May and Jeremy Corbyn’s negotiating teams met for four-and-a-half hours in the Cabinet Office on Thursday for “detailed” talks.
The talks are aimed at finding a consensus Brexit position ahead of a crunch summit of European Union leaders in Brussels on April 10.
David Lidington, effectively the deputy prime minister, led the Government’s negotiating team with Brexit Secretary Steve Barclay, Chief Whip Julian Smith, Business Secretary Greg Clark and Theresa May’s chief of staff Gavin Barwell.
On the other side of the table were shadow Brexit secretary Sir Keir Starmer and shadow business secretary Rebecca Long-Bailey along with senior Labour officials.
A Downing Street spokesman said the “detailed and productive technical talks” were supported by civil servants.
“The Government and the Opposition hope to meet again tomorrow for further work to find a way forward to deliver on the referendum, mindful of the need to make progress ahead of the forthcoming European Council,” the spokesman said.
Any decision on an extension to Brexit in order to prevent the UK crashing out of the EU on April 12 will be taken by EU leaders at that summit.
German Chancellor Angela Merkel said she was still hopeful that a no-deal Brexit could be avoided as “where there’s a will there’s a way”.
Speaking in Dublin alongside Irish premier Leo Varadkar, she said: “We will simply have to be able to do this. We have to be successful and we hope for a solution that we can agree together with Britain.”
Mr Varadkar said: “Matters continue to play out in London and I think we need to be patient and understanding of the predicament that they are in.
“But of course, any further extension must require and must have a credible and realistic way forward.”
The talks in Westminster between the Government and Opposition have highlighted divisions within both the Tory and Labour ranks.
Backbench Labour MPs have issued a warning to Mr Corbyn not to include a second Brexit referendum in any compromise deal thrashed out with Mrs May.
Arriving for the talks in Whitehall, shadow Brexit secretary Sir Keir confirmed that a “confirmatory” referendum was among the ideas on the table for discussion.
But a group of 25 Labour MPs wrote to Mr Corbyn warning that a second public vote would “divide the country further and add uncertainty for business”.
They warned: “A second referendum would be exploited by the far right, damage the trust of many core Labour voters and reduce our chances of winning a general election,” they warned.
Signatories included veteran backbenchers Sir Kevin Barron, Dennis Skinner and Ronnie Campbell, former minister Caroline Flint and MPs for Leave-voting areas of the North and Midlands including Gloria De Piero, Sarah Champion and Gareth Snell.
They said the policy adopted at Labour’s autumn conference made clear there was no need for a public vote if the party secures its preferred customs union deal, which was now “within reach”.
The letter reflects deep fissures within Labour over whether to demand a confirmatory vote as part of any compromise.
Deputy leader Tom Watson has said: “I don’t think our party would forgive us if we were to sign off on a Tory Brexit without that kind of concession.”
And referendum-supporting Labour MP Rupa Huq met the Prime Minister to make the point that potentially hundreds of Opposition MPs could be prepared to back a Brexit deal if it was subject to a public vote.
Meanwhile, a string of Cabinet ministers signalled that Tories could be prepared to compromise on Labour’s key demand of a customs union arrangement with the EU – an idea loathed by Brexiteers.
Attorney General Geoffrey Cox said avoiding a customs union was not an “article of faith”, while Chancellor Philip Hammond said Tories should be ready to look at it.
Health Secretary Matt Hancock told BBC Radio 4’s Today programme that he preferred Mrs May’s deal to a customs union, but added: “I have spoken about the problems of a customs union and I don’t think it’s as good for the country. But I also want to deliver Brexit.”
With time running out before Mrs May must inform European Council president Donald Tusk of the UK’s proposal, Downing Street appeared to indicate that it may not be necessary for MPs to approve any consensus deal ahead of the summit.
The PM’s official spokesman said the important thing was to provide the leaders of the other 27 EU states with “clarity” on the way forward, in order for them to feel able to offer a further extension to the Brexit process.
Mrs May will be expected to spell out the UK’s plans in a letter to Mr Tusk in sufficient time for the other 27 leaders to consider them before they gather in Brussels on Wednesday evening.
The House of Lords was debating a backbench Bill designed to stop the UK crashing out of the EU next week, after it cleared the Commons in a single day on Wednesday.
To avoid the prospect of peers having to sit through the night, Chief Whip Lord Taylor of Holbeach announced a deal had been reached with Labour to hold the Bill’s committee and report stages, and third reading, on Monday.
But ministers have warned that the legislation, tabled by Labour’s Yvette Cooper and passed by the Commons with a majority of just one vote, could create the risk of an “accidental no-deal Brexit” because it gives MPs a vote on any extension obtained by Mrs May next week.
Mr Barclay told the Commons the measure could backfire if MPs reject the proposed delay, as there would be no time to renegotiate it before the deadline for departure on Friday.