UK PM May says Brexit talks reaching their endgame, issues remain

By Andrew MacAskill and Elizabeth Piper

LONDON (Reuters) - British Prime Minister Theresa May said on Monday that there were still considerable unresolved issues with the European Union over Brexit as the two sides approached the "endgame" in negotiations for departure from the bloc.

May's compromise plan, which seeks to maintain close trade ties with the EU in the future, is facing opposition from Brexiteers, pro-Europeans, the Northern Irish party that props up her government, and even some of her own ministers.

"The negotiations for our departure are now in the endgame," May said in a speech at the Guildhall in London's financial district. "We are working extremely hard, through the night, to make progress on the remaining issues in the Withdrawal Agreement, which are significant."

With under five months until Britain leaves the EU, talks have stalled over a disagreement on the so-called Northern Irish backstop, an insurance policy to ensure there will be no return to a hard border on the island of Ireland if a future trading relationship is not agreed in time.

May's attempt to unblock the talks by considering an extension to a status-quo transition period beyond the current proposed end date of December 2021 has both angered eurosceptics and EU supporters in her party.

Fears that the proposals would mean keeping Britain inside the EU's customs union indefinitely or that Northern Ireland would have to accept different rules and regulations to the rest of the United Kingdom have focused opposition to May's deal.

Negotiations are continuing this week, but officials are warning unless there is dramatic progress by the end of Wednesday there is unlikely to be a summit this month to approve a Brexit deal.

Brexit talks with the EU ran through Sunday night until 0245 and resumed on Monday morning.

Both sides need an agreement to keep trade flowing between the world's biggest trading bloc and the fifth largest national economy.

NOT AT ANY COST

The prime minister told the audience in her annual speech at the Lord Mayor's Banquet that she would not agree a Brexit deal "at any cost".

"Both sides want to reach an agreement. But what we are negotiating is immensely difficult," May said. "This will not be an agreement at any cost."

She also said that Britain was open to better relations with Russia after ties plunged to a post-Cold War low over an attack involving a military-grade nerve agent on English soil.

The poisonings of double agent Sergei Skripal and his daughter, Yulia, blamed by Britain on Russian intelligence agents earlier this year, strained ties between the countries.

She said that Britain was "ready to respond in kind" if there were signs of increased cooperation from Russia.

A year ago, May used a speech at the same venue to accuse Moscow of military aggression and of meddling in elections, some of her strongest criticism even before the poisoning of a former Russian spy.

This year, she said that the action taken since - including the largest ever coordinated expulsion of Russian intelligence officers - had "fundamentally degraded" Russia's intelligence capability.

Despite the ongoing threats, the prime minister will say "this is not the relationship with Russia that we want."

(Reporting by Andrew MacAskill and Elizabeth Piper; Editing by Richard Balmforth)