Britain has welcomed France having “stepped back” from threats to impose punitive action in a dispute over post-Brexit fishing licences as talks to settle the row continue.

Environment Secretary George Eustice acknowledged a de-escalation from French president Emmanuel Macron as he held off on the action against British boats that he had warned could have been implemented on Tuesday.

But the Cabinet member said a meeting between Brexit minister Lord Frost and France’s Europe minister Clement Beaune in Paris on Thursday would be “very important” as further talks with the EU are also scheduled.

Meanwhile, Downing Street was forced to clarify a suggestion by Mr Eustice that the British vessel impounded during the diplomatic storm because of “administrative confusion” had been released by France after it emerged it remains in Le Havre.

We welcome the fact France has stepped back from the threats it was making last Wednesday

Mr Macron had warned that Paris could block British boats from landing their catches in French ports and tighten customs checks from midnight in protest at what they claim is a refusal by the UK authorities to grant licences to French boats.

But France suspended the threats at the eleventh hour as negotiations continue.

Mr Eustice told Sky News: “We welcome the fact France has stepped back from the threats it was making last Wednesday.

“We’ve always said we want to de-escalate this and always said we have an ever open door to discuss any further evidence France or the EU might have on any additional vessels they’d like to have licensed.

“France has clearly taken a decision not to implement some of the decisions they threatened last Wednesday, we very much welcome that, but I think there’s going to be a very important meeting on Thursday between Lord Frost and his opposite number, not just on fisheries but a wider range of issues as well.”

Mr Eustice told broadcasters he understood the Scottish-registered scallop dredger, the Cornelis Gert Jan, “has now been released” following “administrative confusion” related to a change in the vessel’s engine.

However, officials later acknowledged it remained subject to detention by French authorities in Le Havre.

Macduff Shellfish, the owner of the boat, was under the impression it would remain at Le Havre until at least after a hearing schedule in Rouen on Wednesday.

The Prime Minister’s official spokesman said: “The vessel concerned remains in port having been detained by the French authorities.”

The European Union said talks convened with officials from France, the UK, Jersey and Guernsey would continue on Tuesday.

On Monday night, just hours ahead of the deadline set by Paris, the French president was reported to have told journalists at the Cop26 summit in Glasgow: “Since this afternoon, discussions have resumed on the basis of a proposal I made to Prime Minister (Boris) Johnson.

“The talks need to continue. My understanding is that the British were going to come back to us tomorrow with other proposals. All that will be worked on.

“We’ll see where we are tomorrow at the end of the day, to see if things have really changed.

“My wish is that we can find a way out on all these issues.”

Mr Macron and Mr Johnson met briefly as the French president arrived in Glasgow.

Earlier, Downing Street said it had “robust” contingency plans in place if Mr Macron’s government carried out threats to disrupt trade from midnight.

Foreign Secretary Liz Truss said the UK would take legal action under the UK-EU Brexit trade deal, and a tit-for-tat retaliation to French action had not been ruled out.

The UK has granted licences to 98% of EU vessels which have requested permission to operate in British waters.

But the dispute centres on access for small boats, under 12 metres, wishing to fish in the UK six to 12 nautical mile zone.

The government in Paris was angry that the UK originally granted only 12 licences out of 47 bids for smaller vessels, a figure which has now risen to 18.

Only boats which can demonstrate they have fished in UK waters for one day in each of the years between 2012 and 2016 qualify for a licence.

The Elysee Palace had said that without movement from the UK Government, the retaliatory measures would come into force at midnight, the French news agency AFP reported.