Boris Johnson will hold crunch talks with German chancellor Angela Merkel and other EU leaders on Brexit policy next week as the UK government fleshes out plans for an all-Ireland economic relationship which seeks to replace the disputed backstop.

Despite the EU expressing frustration over Mr Johnson’s failure to table concrete proposals at Monday’s meeting with European Commission president Jean-Claude Juncker in Luxembourg, British officials are stepping up ambitious proposals to facilitate trade between Northern Ireland and the Irish Republic.

In recent weeks, Mr Johnson has mooted the idea of reducing the presence of a post-Brexit border across the island of Ireland by promoting a common zone for agriculture and foodstuffs, a common electricity market and maintaining a common travel area.

But UK officials are now letting it be known that Britain wants to extend discussions on how to create an “all-island” economic relationship by tackling trickier areas such as customs, value added tax, industrial goods and the remit of the European Court of Justice.

“The philosophy underpinning the government’s approach is that it is no longer seeking frictionless trade between Northern Ireland and the EU but is rather seeking to facilitate trade between Northern Ireland and the EU,” said Mujtaba Rahman, managing Director of the Eurasia Group consultancy. “It’s a vision in which the [Northern Ireland-EU relationship] will be very different to the [EU-Great Britain] relationship.”

Under the UK plan, Northern Ireland would effectively become a special economic zone inside both the UK and the EU. A border would continue to exist and everything that is not covered by the all-island regime would be subject to checks.

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However, the UK’s intention is that these checks would be carried out away from the border to avoid reigniting tensions between Northern Ireland and the Republic.

Downing Street said Mr Johnson was likely to meet Ms Merkel and EU President Donald Tusk on the sidelines of the UN General Assembly in New York next week.

The prime minister hinted at the idea of creating an all-Ireland economy on Monday when he told the BBC: “You know the famous dictum . . .[that] in Northern Ireland the people are British, but the cattle are Irish. You know there’s a germ of an idea.”

But according to some UK officials the task ahead for both sides in securing an agreement is daunting.

“There’s been a lot of activity but the difficulties are greater than people think,” said one official. “Although progress is being made on agriculture, we haven’t yet begun negotiations on what kind of customs border there should be. Is it a customs border between Northern Ireland and Ireland; or Northern Ireland and Great Britain? This is hugely important.”

EU officials also described a lunch in Luxembourg on Monday between Mr Johnson, Michel Barnier, and Mr Juncker as the moment the “penny dropped” for the prime minister on the complexities involved in replacing the Irish backstop.

Mr Johnson was told by his counterparts that the UK’s proposals on allowing Northern Ireland to stick to common EU rules on food and livestock was not a sufficient replacement for the Irish backstop as it would still require customs checks on other types of goods.

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“It was clear that Boris was on a learning curve,” said an EU official. Another described Mr Johnson as “slumping” into his seat over the course of lunch as the reality of the tight negotiating schedule dawned.

A Number 10 official last night rejected the description of the lunch as “nonsense”.

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