Britain and the EU have said they will continue talks on a free trade agreement beyond a self-imposed deadline on Sunday.

European Commission President Ursula von der Leyen said it was "responsible at this point in time to go the extra mile" to reach a deal.

"We have accordingly mandated our negotiators to continue the talks and to see whether an agreement can even be reached at this late stage," she said in a joint statement after talks with UK Prime Minister Boris Johnson.

European Council President Charles Michel welcomed the decision to go on with talks, saying that everything possible should be done to reach a "good deal."

Johnson said the UK would not be the one to walk away from Brexit talks, but he still said Britain should prepare for a no-deal situation.

"We're going to keep talking. The UK certainly won't walk away from talks. ... The most likely thing now is we've got to get ready for WTO terms, Australia terms," Johnson said.

"Either way, whatever happens, the UK will do very, very well," he added.

Sunday's deadline was just the last in a series of such self-imposed cutoff dates, but time is running short, with a transition period scheduled to end on December 31.

EU chief Brexit negotiator Michel Barnier said late Sunday that he would brief the bloc's ambassadors early Monday morning regarding the state of negotiations with the UK.

Early-morning talks

Earlier on Sunday, the chief negotiators from the European Union and United Kingdom continued efforts to reach a deal on the UK's future trading relationship with the bloc as the deadline loomed at the end of the day.

The EU's Michel Barnier and the UK's David Frost started talks just after dawn in a bid to reach agreement. Negotiations have already been running for almost a year.

Frost reportedly left the talks after an hour and a half to return to the UK diplomatic mission in Brussels.

German Chancellor Angela Merkel has also said everything that is possible should be done to reach a deal.

Hardened negotiating stances

The UK officially left the EU on January 31, but trade and other sectors remain within the bloc's structures until the end of the year.

Talks on a deal have so far failed largely because of the UK's insistence that it should trade with the bloc with as few restraints as possible and the EU's stance that Britain must stick to EU rules to ensure fair competition.

The UK claims that the EU intends to subvert Britain's status as an independent and sovereign nation by forcing it to obey the bloc's rules. The EU, in turn, fears that Britain could drastically lower its social and environmental standards while subsidizing UK industry with state money, thus creating a low-regulation economic rival hovering at its margins.

British Foreign Secretary Dominic Raab said on Sunday that there was probably "a long way to go."

Likely Brexit chaos

If no deal is reached in the continued talks, time will be short to prepare for likely chaos on January 1, with imports into and exports out of the UK negatively affected.

Without a deal, the UK would have to trade with the EU under World Trade Organization rules — a system that British Prime Minister Boris Johnson has been euphemistically calling the "Australian" model. That would entail numerous tariffs and barriers.

Other issues hampering the talks have been differences over the legal oversight of any deal and fishing rights in UK waters.

Johnson, who has said it is "very, very likely" that negotiations will fail, insists that the UK will thrive whether or not a deal is reached.

tj/mm (AP, Reuters, AFP)