The Taoiseach has raised the prospect of EU officials working on the text of a Brexit deal on Christmas Day if a breakthrough comes before then.

Mr Martin said he and other European leaders were on “standby” to endorse any agreement that might emerge from negotiations between Brussels and the UK Government.

“If you had a breakthrough tonight or tomorrow officials in Europe could be working Christmas Day on the text,” he said.

He said the talks were “all down to fish” and significant differences remained.

Mr Martin said both sides were still a distance apart in agreeing a reduction in the EU catch in UK waters.

It’s all down to fish, it would appear right now,

He said there was also EU concern about a UK demand for an annual negotiation on catch size, claiming that would create “instability”.

On Tuesday, Mr Martin has said a deal was “more likely than less likely”.

The Taoiseach reiterated that view on Wednesday morning.

“On balance I think, given the progress that has been made, that there should be a deal,” he told RTE Radio One.

“And I think that a no deal would be an appalling shock to the economic system on top of Covid-19 which has really hit the respective of economies of the UK, Ireland and the EU member states.

“In particular, our domestic economy has taken a very big hit.

“And so we do need a deal.”

Mr Martin said fishing was still the main obstacle in the way of a deal.

“It’s all down to fish, it would appear right now,” he said.

“There was a lot of progress made on the level playing field over the last two to three weeks and it’s very difficult for all involved but the gap is still wide on fish, and for fishing communities in Ireland it’s a time of worry.”

Mr Martin said the EU was agreeing to reduce the number of fish caught in UK waters by 25%, accompanied by a six-year transition period.

He suggested the UK was asking for a drop in excess of 35%.

“It’s not just about monetary terms, I think it’s about the sustainability of the fishing industry in the respect of member states and there’s six or seven member states have particular concerns here,” he said.

“It’s about sustaining rural communities.”

He said there was a need for a sustainable future agreement on fishing and expressed concern about a UK demand for annual negotiations.

“One of the concerns here is that Britain must have annual negotiations in terms of access to its waters and to the fish in its waters, which I think would be a recipe for instability and in terms of the fishing community wanting to know what does the future look like,” he said.