A No 10 source has said a Brexit deal is “essentially impossible” after a call between the PM and Angela Merkel.
Boris Johnson and the German chancellor spoke earlier about the proposals he put forward to the EU – but the source said she made clear a deal based on them was “overwhelmingly unlikely”.
The BBC’s Adam Fleming said there was “scepticism” within the EU that Mrs Merkel would have used such language.
And the EU’s top official warned the UK against a “stupid blame game”.
President of the European Council Donald Tusk sent a public tweet to Mr Johnson, telling him “the future of Europe and the UK” was at stake.
With the Brexit talks on an apparent knife edge, the details of a call earlier on Tuesday between the UK and German leaders have reignited tensions across the continent.
The No 10 source suggested Mrs Merkel told her counterpart the only way to break the deadlock was for Northern Ireland to stay in the customs union and for it to permanently accept EU single market rules on trade in goods.
This, the source said, marked a shift in Germany’s approach and made a negotiated deal “essentially impossible”.
The prime minister’s official spokesman said the conversation had been “frank” but denied the negotiations were all but over.
Mrs Merkel’s spokesman said her office would not reveal details of “private, closed” conversations but Norbert Rottgen, an ally of the chancellor who is chair of the Bundestag’s Foreign Affairs Committee, said there was “no new German position”.
He tweeted that a deal based on the UK’s latest proposals had “been unrealistic from the beginning and yet the EU has been willing to engage”.
The BBC’s Europe editor Katya Adler said it was “no secret” Berlin found the UK’s proposed new customs solution for Northern Ireland problematic.