Boris Johnson will fly to Brussels on Wednesday to try to reach a breakthrough on a post-Brexit trade deal over dinner with European Commission president Ursula von der Leyen.

The Prime Minister and the EU chief will continue their talks in person after the UK Government dropped controversial plans that would have allowed ministers to break international law.

The olive branch came after the two sides reached an agreement on the implementation of the Withdrawal Agreement divorce deal as time rapidly runs out to the end of the transition period on December 31.

Meanwhile, Brussels’ chief negotiator Michel Barnier warned EU foreign ministers that he now believes a no-deal departure is more likely than a trade agreement being brokered in time, the PA news agency understands.

But both sides have set the stage for a potentially make-or-break meal in the EU Commission’s Berlaymont headquarters on Wednesday.

In a statement, Downing Street said: “The PM will travel to Brussels tomorrow for dinner with VDL to continue discussions on the future relationship between the UK and the EU.”

Ms von der Leyen said that “I look forward” to welcoming Mr Johnson on Wednesday evening, adding: “We will continue our discussion on the Partnership Agreement.”

No 10 hopes the dinner could pave the way for talks between negotiators Mr Barnier and his Downing Street counterpart Lord Frost to resume, but there were warnings there would not be a compromise on sovereignty.

A UK Government source said: “It’s clear that some political impetus will be required for the talks to make any more progress.

“If we can make progress at a political level it may allow Lord Frost and his team to resume negotiations over the coming days.

“But we must be realistic that an agreement may not be possible as we will not compromise on reclaiming UK sovereignty.”

Leaders of the EU’s 27 member states are due to gather in Brussels on Thursday for a two-day summit, potentially giving political impetus for a deal.

Earlier on Wednesday, Cabinet Office minister Michael Gove and his counterpart on the UK-EU joint committee, Maros Sefcovic, reached an agreement on border checks and trading rules for Northern Ireland.

Their discussions are separate from the trade talks, which remain deadlocked, but the agreement could improve relations between the two negotiating teams.

Ministers enraged the EU by requesting the powers to breach international law in overriding parts of the Withdrawal Agreement in the UK Internal Market Bill, arguing it was needed to protect the trading relationship between Great Britain and Northern Ireland in the event of no-deal.

But Mr Gove and Mr Sefcovic said in a statement that “an agreement in principle” had been reached on all issues and that the Government would withdraw the controversial clauses of the Bill.

“Following intensive and constructive work over the past weeks by the EU and the UK, the two co-chairs can now announce their agreement in principle on all issues, in particular with regard to the Protocol on Ireland and Northern Ireland,” they said.

The agreement covers issues including border checks on animal and plant products, the supply of medicines and deliveries of chilled meats and other food products to supermarkets.

There was also “clarification” on the application of rules on state subsidies.

Mr Sefcovic said he hoped the agreement would provide “positive momentum” for the trade talks, although he acknowledged the two sides were still “very far apart”.

Mr Gove, who will set out further details in Parliament on Wednesday, told reporters that businesses in Northern Ireland would get the “best of both worlds” with EU single market access and “unfettered access” to Great Britain.

Westminster was understood to have resisted EU calls for a permanent office in Belfast, but will allow the bloc to station officials there.

It comes after the Prime Minister said trade talks with the bloc were proving “very tricky” and that it was “very, very difficult” to make progress, but that he was hopeful about reaching a deal.

The attempt to salvage a deal with face-to-face talks between the two political leaders in Brussels will come after a lengthy phone call on Monday failed to break the deadlock in negotiations led by Lord Frost and Mr Barnier.

Lord Frost was to return to London on Tuesday to discuss the remaining differences in reaching a free trade deal with Mr Johnson, Downing Street said.

The Prime Minister said he hoped the “power of sweet reason” would triumph but Brussels had to accept there were limits to what terms the UK would be prepared to accept.

Talks have faltered on the issues of fishing rights, the “level playing field” measures aimed at preventing the UK undercutting the EU on standards and state subsidies, and the way that any deal would be governed.

In a message to Brussels, Mr Johnson acknowledged the two sides “are a long way apart” on fisheries and said there may be a point where it is “time to draw stumps” and accept that a deal is impossible.

“There are just limits beyond which no sensible, independent government or country could go and people have got to understand that,” he added.

He continued to insist the UK will “prosper mightily” with or without a trade deal with the EU, despite grim warnings from the budget watchdog and the governor of the Bank of England about the impact.

The Office for Budget Responsibility has suggested that a no-deal situation could wipe 2% off gross domestic product, a measure of the size of the economy, in 2021.

Bank governor Andrew Bailey has warned that the long-term damage caused by a no-deal situation would be worse than the economic hit from coronavirus.

But Mr Johnson urged people to “be in good cheer” as there were “great options ahead” for the country.