Downing Street has dropped suggestions that Brussels could block food exports from Britain to Northern Ireland as it signalled optimism over trade deal negotiations with the EU.

Boris Johnson had used threats of a “blockade” in the Irish Sea to justify the need to take powers which could breach international law by breaking the terms of the Brexit divorce deal.

Brussels always vehemently denied it would hinder food transport by refusing to give the UK third country status and No 10 on Friday seemed to accept it was no longer the case.

Asked about a report suggesting Downing Street was growing optimistic that a deal could be reached, a spokesman said: “We’ve had useful exchanges with the EU over the past couple of weeks and progress has been made in certain areas.

The EU has now confirmed that normal processes will be followed on third country listings

“For example, the EU has now confirmed that normal processes will be followed on third country listings.

“But we’ve always been clear that a number of challenging areas remain, which is why we continue to be committed to working hard to reach an agreement and we look forward to the next negotiating round in Brussels.”

Two key areas of contention continue to be state aid provisions and access to fisheries.

Mr Johnson had as recently as last week told MPs that the EU had not taken the “revolver off the table” with regards to the “extreme” and “unreasonable” position over food.

He argued his controversial UK Internal Market Bill was needed to prevent Brussels carving up the UK, as trade negotiations threatened to become deadlocked.

In the face of widespread outrage and a Tory rebellion, the Prime Minister was forced to compromise to give MPs a vote before the Government can use powers which would breach the Withdrawal Agreement he brokered with the EU last year.

Asked about the apparent optimism, EU Commission spokesman Daniel Ferrie told a Brussels briefing that chief negotiator Michel Barnier remained “neither optimistic nor pessimistic but he’s determined to reach a deal”.

Mr Barnier was in London for informal talks on Wednesday before official negotiations resume next week in Brussels as time to reach a deal dwindles.

There are fewer than 100 days until the transition period, in which the UK remains in the single market and continues to follow EU law, ends on December 31.