Ireland is warning that no post-Brexit trade deal will be struck if the UK pushes on with a plan to break international law.
Tensions have been ratcheted up following comments by senior figures in both governments ahead of another crucial week for negotiations.
Ireland's foreign minister Simon Coveney told Sky News that should Boris Johnson persist with trying to override parts of the divorce deal, then a new treaty on the future relationship will be off the table.
"This is move week," he said. "We've got to make big progress."
But a senior minister in the UK confirmed that Mr Johnson will stick to his plan and keep the controversial parts of the draft legislation in place.
Peers have removed the offending bits of the Internal Market Bill, which included giving ministers the power to "disapply" parts of the with withdrawal agreement relating to goods moving between Northern Ireland and Great Britain.
The draft legislation is due to go back to the Commons, but Environment Secretary George Eustice told Sophy Ridge on Sunday all the original parts will be added again.
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He faced down the ultimatum from Mr Coveney, who told the programme that if that happened then: "This is a deal that won't be ratified by the EU.
"There is an absolutely unanimous view that if the British government deliberately decides to break international law and undermine a treaty that's not even 12 months old, well then why would the EU sign up to a new deal, when the UK is breaking the existing one?
"Any logical person listening to that argument surely understands where the EU is coming from."