The EU is expected to back down over demands to Britain’s fishing waters and will accept a deal with the UK where London and Brussels negotiate quotas annually.

The British government and the EU have agreed for negotiators David Frost and Michel Barnier to work on a compromise that would see the EU step back from demanding permanent rights to access Britain’s territorial waters on equal terms to the bloc’s Common Fisheries Policy (CFP).

Currently, European fishermen land more than 60 per cent of fish caught off the UK’s coast, including 91 per cent of Britain’s English Channel cod. The relationship is further unbalanced, with EU fishermen catching five times the value of fish in British waters as British fishermen catch in European waters.

Sources speaking to The Times said that Mr Barnier has accepted British ‘zonal attachment’, and like the EU-Norway arrangement, will negotiate reciprocal fishing rights in an annual contract. The EU’s chief negotiator is said to be holding off on the announcement until further aspects of the trade deal are announced in order to make it easier to convince other fishing nations like France, Spain, and the Netherlands to let go of the current policy.

“To dilute the influence of France and the other coastal states, Barnier needs to have the whole trade deal, which stands or falls on fishing,” the Brussels diplomatic source told the newspaper of record.

Another source, from the British government, also confirmed that there are “signals” that this is the direction in which Barnier wants to direct negotiations, “but as yet there are no firm proposals on the table”.

Reports in recent months have suggested that relaxing fishing demands is exactly the direction that Mr Barnier wants to take to avoid the economic impact on the bloc of no trade deal with the UK, but coastal states that benefit the most from the current right to pillage Britain’s fish have intervened.

The leader of one such member state — the president of France, Emmanuel Macron — is set to meet Prime Minister Boris Johnson on Thursday, the first face-to-face meeting between the British premier and a European leader tied closely to negotiations since the beginning of the Chinese coronavirus pandemic.

Resistance may still be met from Europe, however, with any future trade deal needing to be ratified by the European Parliament. French MEP Nathalie Loiseau told the BBC on Monday that her country is “ready either for an agreement or for a no-deal”. Ms Loiseau said that while she still believes it is possible to agree on a deal, she said France is “getting prepared more actively to a no-deal considering the circumstances”.

The UK officially left the EU on January 31st, 2020, but remains aligned with the bloc’s rules and regulations in a transition period which lasts until December 31st, 2020. During those 11 months, both sides are working on agreeing to a future trading relationship. If a deal is not made, the UK will exit the EU’s institutions fully, and trade with the bloc on World Trade Organization (WTO) terms.

The report comes after Prime Minister Johnson spoke via video conference to the EU’s top leaders, with both parties agreeing “that new momentum was required”.

London and Brussels also both agreed for their chief negotiators, Frost and Barnier, “to intensify the talks in July and to create the most conducive conditions for concluding and ratifying a deal before the end of 2020”.

Mr Johnson also said that there is “no reason” why a deal cannot be struck by the end of next month.

“It is very clear what we need to achieve. I don’t think we’re that far apart, but what we need is a bit of oomph in the negotiations, and I was pleased that Ursula von der Leyen [and other EU officials] all agree … There is no reason why we shouldn’t get this done in July,” the prime minister later told reporters on Monday.

Earlier on Monday, Mr Johnson is believed to have told Brussels that a free trade agreement must be made by autumn, or the UK will prepare for a WTO relationship.