Britain's May in Brussels for moment of truth

British Prime Minister Theresa May will try to reach a deal on Brexit divorce terms with European Commission chief Jean-Claude Juncker on Monday as months of tense negotiations reach a decisive moment.

The European Union says their working lunch in Brussels is the "absolute deadline" for progress on separation issues, or else it will be unable to approve the opening of talks on a future trade relationship at a summit on December 15.

Reaching agreement on Monday will be "difficult but doable", a senior EU diplomat told AFP, with divisions remaining on the fate of the Irish border and the rights of European citizens living in Britain.

London has however rejected the EU's deadline, and appears keen to push the issue to the wire.

"With plenty of discussions still to go, Monday will be an important staging post on the road to the crucial December Council," a British government spokesman said in a statement.

Talks continued over the weekend, May's Downing Street office said.

May, Brexit minister David Davis and the prime minister's Brexit adviser Olly Robbins will have lunch in Brussels at 1215 GMT with Juncker, EU Brexit negotiator Michel Barnier and Juncker's chief of staff Martin Selmayr.

The British prime minister will also meet European Council President Donald Tusk, who is in charge of summits, Downing Street said.

'Unacceptable for EU'

A formal decision on any deal is not expected until Wednesday, when Barnier reports to European Commissioners and then holds a press conference.

The EU has demanded "sufficient progress" on the key divorce issues of Britain's Brexit bill, citizens rights, and Ireland in order to move on to talks on a post-Brexit transition period and future relations.

Failure to do so this month could make the EU "rethink" whether an overall Brexit withdrawal deal is possible at all, Tusk has warned, raising the prospect of a chaotic exit with far-reaching economic effects.

After months of deadlock, London and Brussels have effectively reached a deal on the contentious issue of the divorce bill, reported to be between 45 and 55 billion euros ($53-63 billion).

But Ireland, which is remaining in the European Union, has now emerged as the biggest problem with Tusk saying that the EU will not accept Britain's offer if Dublin is not satisfied with proposals for future border arrangements.

"If the UK offer is unacceptable for Ireland, it will also be unacceptable for the EU," Tusk said after meeting Irish Prime Minister Leo Varadkar in Dublin on Friday.

Worries that the return of checkpoints could reignite the sectarian divisions that led to decades of conflict in Northern Ireland have led to calls for London to come up with a way to avoid a hard border.

London however says it refuses to create a new border within British territory.

Citizens' issues 'stalled'

Fears over the rights of more than three million Europeans living in Britain after 2019 have also been raised, with Brussels saying they must still be protected by EU law.

In a sign of the seriousness of the concerns, Juncker will hold talks with the European Parliament's Brexit task force led by former Belgian premier Guy Verhofstadt on Monday before he meets May.

"In Brexit negotiations, money is one of the problems, but it is not the biggest one," Manfred Weber, the head of the European People's Party, the largest group in the European Parliament, said on the eve of the talks.

"We are much more concerned about the fact that so far negotiations are stalled on the protection of EU citizens' rights after Brexit and on the Irish case."

On the divorce bill, Britain and the EU appear to have reached a compromise, with London increasing its offer, but Brussels offering enough wiggle room for the British government to be able to present its own, lower figures to the public.

London has restated May's commitment made in a speech in September that will cover Britain's contributions to the EU budget in 2019 and 2020, even after leaving the bloc.

It has also promised to "honour commitments" made during Britain's four-decade membership, after going through the details line by line.