Taoiseach Leo Varadkar said he is "surprised and disappointed" the British government was unable to conclude a deal he believed had been agreed on Irish Border after Brexit.
At a press conference in Brussels with British prime minister Theresa May, European Commission president Jean-Claude Juncker said there had been no agreement during talks on Monday.
It is understood the British prime minister met fierce resistance from the DUP, which is propping up her Conservative government, to proposals which would have ruled out a hard Border and aligned Northern Ireland’s regulations with the Republic.
After news of the proposed deal leaked on Monday, DUP leader Arlene Foster had said: "Northern Ireland must leave the EU on the same terms as the rest of the UK.
"We will not accept any form of regulatory divergence which separates Northern Ireland economically or politically from the rest of the United Kingdom. "
Speaking in Dublin, Mr Varadkar said he been told that a deal had been struck. He said he had sought a written guarantee that there would be no hard Border on the island of Ireland which “has been to the absolute forefront of Ireland’s concerns” since the Brexit referendum last year.
"We don't want an Irish Sea border any more than we want one between Newry and Dublin," he said. He said he had contacted Mr Juncker and European Council president Donald Tusk and confirmed there was agreement over the text.
“I acknowledge that Theresa May is negotiating in good faith. My position is unequivocal. Ireland wants to proceed to phase two. We cannot agree unless there are firm guarantees on the lack of a hard Border in any circumstances. I still hope this matter can be concluded in the coming days.”
When asked by a reporter about the difference between the terms “regulatory convergence” and “regulatory alignment”, he said the two things “mean the same in our view. We are happy to accept either.”
‘Just one party’
Regarding the role of the DUP, he said listening to the DUP is important, but that they were just one party in Northern Ireland, “we need to have regard to all the parties”.
"That's always been our approach in this. The motivation of the Irish Government is to try to maintain the status quo in Ireland, allowing people to continue with their normal lives, cross the Border as they do now. We don't wont to pick a row with anyone, there's no hidden agenda here."
He said it was never the Irish Government’s role to ensure the DUP was onside. “We engaged in negotiations in good faith with EU and UK. We agreed a text this morning, we believe it stands, but we believe the prime minister needs more time.”
The Taoiseach refused to ascribe blame for the failure of a deal. “I don’t think pointing fingers would allow us to get where we want to get in this.” He refused to be drawn on what DUP leader Arlene Foster’s role was in the issue.
Tánaiste and Minister for Foreign Affairs Simon Coveney added: "Negotiating teams have been in place for weeks now, the issues were also raised in Westminster, it's through that negotiating structure that we have worked up a draft that we were able to conclude this morning, agreed with the president of the Commission and Council." The "deal was done", he stressed.
“The Taoiseach and I are at one on this. We had a deal today in relation to a wording that in our view would provide reassurance over a hard Border in Ireland. We don’t want that.
“We need a credible way in which he could ensure that could be avoided.
“We want to ensure that wording remains intact. If we are going to move on to phase two we need to ensure there will be no hard Border in Ireland.”
Earlier, in Brussels, Mr Juncker said Ms May was a tough negotiator who had defended the UK’s point of view, and “despite best efforts it was not possible to reach a complete agreement today”.
“We stand ready to resume the negotiations”, he said, adding “I have to say we are narrowing our positions”.
“I’m still confident that we can reach sufficient progress before the European Council [meets] on 15th of December.”
Ms May said the sides have had a constructive meeting, and that “it is clear that we want to move forward together”. She said there would be further negotiation and consultation. “We will reconvene before the end of the week. We will conclude this positively.”
Mr Juncker concluded saying neither party would be taking questions.
Earlier, Mr Coveney had said he suspected the Border in the future will “look much like what it looks today” and will be “largely invisible”, with no barrier to trade.
“We have language now that gives us the safeguards we need and reassurance that a hard Border will not re-emerge,” he said.
The Tánaiste added the Irish Government was “in a much better place than we have been at any point in the Brexit negotiations”.
Sources suggested the compromise had involved the UK agreeing to maintain “regulatory alignment” in customs regulations and trade practices between the North and South of Ireland. Originally, Ireland had sought a commitment to “no divergence” in these areas.
News of the earlier deal, raising the prospect of starting Brexit trade negotiations in the coming weeks, lifted sterling earlier.
Irish Government sources had said the deal would guarantee “regulatory alignment” between Northern Ireland and the Republic in all Brexit eventualities.
A British government source suggested there was “a significant difference” between the phrase “continued regulatory alignment” and “no regulatory divergence” between the two parts of Ireland.
A draft of the agreement between Britain and the EU is reported to commit to “continued regulatory alignment” on the island of Ireland if Britain leaves the EU without a trade deal.
The phrase offers more flexibility, implying that regulations could be distinct but equivalent, rather than obliging Northern Ireland to retain EU regulations.
Reacting to reports that the UK has agreed there will be no regulatory divergence on the island of Ireland on the single market and customs union post-Brexit, DUP chief whip Jeffrey Donaldson MP said: "That is not our understanding of the UK government's position."
DUP MP Sammy Wilson told BBC Talkback the British government had made clear the UK will leave the EU in its entirety and is committed to no economic or territorial divergence.
“I am not going to let Irish Government leaks lead me down the road of speculation,” he said.
Mr Wilson said there are difficulties with what is being suggested, claiming it is “impossible to guarantee convergence as many powers rest with Stormont”.
He suggested the Irish Government was “trying to bounce” the British government into something they like. “They are doing their best to undermine the unionist position,” he added.
Former UUP leader Lord David Trimble told BBC Radio 4 the proposed Border deal was "a thoroughly bad idea".