LONDON - Britain said on Tuesday it would drop clauses in draft domestic legislation that breach the Brexit Withdrawal Agreement after it clinched a deal with the European Union over how to manage the Ireland-Northern Ireland border.

READ MORE: UK's PM: Moment may come to end post-Brexit EU trade talks

Michael Gove, one of Prime Minister Boris Johnson’s most senior ministers, announced an “agreement in principle on all issues, in particular with regard to the Protocol on Ireland and Northern Ireland.

The agreement removes what was a major point of contention between Britain and the EU, with Brussels warning that no wider trade deal would be possible if London went through with its threat to unpick the exit treaty

The agreement removes what was a major point of contention between Britain and the EU, with Brussels warning that no wider trade deal would be possible if London went through with its threat to unpick the exit treaty.

Sterling jumped by almost a cent against the US dollar on the news, erasing most of the day’s losses to stand at US$1.3367 at 1330 GMT, and also rose sharply against the euro.”

The deal - which is separate to trade talks - will ensure that the Withdrawal Agreement is fully operational as of Jan 1, European Commission Vice-President Maros Sefcovic said.

Britain will now withdraw clauses 44, 45 and 47 of the UK Internal Market Bill, and not introduce any similar provisions in an upcoming taxation bill, the government said. Those clauses would have broken international law.

ALSO READ: UK, Norway and Iceland sign trade continuity deal

The breakthrough came as Johnson warned that the ongoing trade talks were proving "very tricky" ahead of his upcoming crunch meeting with top EU officials on Thursday.

In this handout photo issued by 10 Downing Street, Britain's Prime Minister Boris Johnson speaks from 10 Downing Street praising NHS staff in a video message, after he was discharged from hospital a week after being admitted with persistent coronavirus symptoms, in London, April 12, 2020. (PIPPA FOWLES / AP)

Johnson said earlier on Tuesday that there may be a time when Britain should call an end to post-Brexit trade talks.

With just over three weeks before Britain completes its journey out of the bloc, Johnson is due to meet European Commission head Ursula von der Leyen in the coming days, after negotiators failed to close the gaps in talks.

With just over three weeks before Britain completes its journey out of the bloc, Johnson is due to meet European Commission head Ursula von der Leyen in the coming days, after negotiators failed to close the gaps in talks

Both sides have called on the other to compromise to get a deal over the line but neither has been forthcoming. On Tuesday Britain repeated its red lines in the talks, as did France, which has taken a particularly tough line among EU members.

While a senior British government source said there was “every chance we are not going to get there”, French European Affairs Minister Clement Beaune said Paris would oppose any agreement that “sacrifices” its fishermen.

Since Britain left the European Union in January, the two sides have been stuck over three issues, raising the prospect of what many businesses say is their nightmare scenario - no agreement to govern around US$1 trillion in annual trade.

ALSO READ: EU tells Johnson to decide as time runs out for Brexit deal

Asked if he would try to do a deal right up until the wire, Johnson told reporters: “Yeah of course.”

“We’re always hopeful but you know there may come a moment when we have to acknowledge that its time to draw stumps and that’s just the way it is,” said Johnson, using a cricketing term for the end of play.

“We will prosper mightily under any version and if we have to go for an Australian solution then that’s fine too,” he added. Australia has no free trade deal with the EU, which means the bulk of its trade is on World Trade Organization terms.

Beaune told RMC radio said he still thought “we still have a few days to negotiate”, but “on fisheries there is no reason to yield to Britain’s pressure. We can make some efforts but sacrificing fisheries and fishermen, no.”

READ MORE: UK, EU leaders say conditions for Brexit trade deal 'not there'