The European Union could take legal action under its divorce treaty with Britain if emergency talks on Thursday do not reassure Brussels sufficiently that a proposed new British law will not break previously agreed commitments.
The two sides will hold the emergency talks at 1200 GMT on Thursday over Prime Minister Boris Johnson's plan to undercut parts of the Brexit divorce treaty, a step Brussels has warned could scupper any chance of a trade deal.
"First there is the Joint Committee. If it's short on the necessary clarifications, the dispute settling mechanism under the Withdrawal Agreement is there," said an EU diplomat dealing with Brexit.
Two other EU officials also involved in the talks said the bloc's executive European Commission would analyse the UK's new Internal Market Bill once it is passed to take into account any amendments before making a final decision on the legal case.