British Prime Minister Theresa May will go back to the drawing board to find a post-Brexit customs compromise to unify her cabinet, after ministers could not agree what approach to take.
May is said to have asked for her two existing options to be revised in a bid to find a consensus following a meeting of her Brexit "war cabinet".
It means that with five months to go until a Brexit deal is supposed to be set, the UK still has no clear position on exactly what kind of customs arrangements it wants with the EU after withdrawal.
In a bid to preempt the deadlock, Downing Street hinted ahead of Wednesday's meeting that the prime minister's thinking on customs options was "evolving" from the two options she had already set out.
Up to now May has proposed two options - a "customs partnership", which favors closer customs ties with the EU to avoid a hard border in Ireland, or a "streamlined arrangement" with looser customs ties, but a harder border.
She is yet to name her preferred option, though she and Philip Hammond, the chancellor, are thought to favor the partnership plan - which is hated by Brexiteers who see it as too close to the UK's current customs position.
With the overall balance of the cabinet six to five against the proposal, one source said Brexiteers now believe they have "killed" the option.
But in a sign that May is not ready to let go of it, the prime minister asked for more work to be done on both of her existing proposals.
The partnership plan would see Britain collect tariffs on the EU's behalf at ports and airports, passing on a share of the money to Brussels - then if the UK sets different tariffs from the EU, traders would claim refunds from HMRC for goods that stay in Britain.
Source: News Agencies, Edited by website team