Downing Street has made a major counter-offer on fishing access for EU fleets in British waters to break the Brexit trade talks deadlock, raising hopes of a deal before Christmas. After a difficult period of negotiations, with both sides seemingly entrenched, the UK’s chief Brexit negotiator, David Frost, is understood to have tabled a proposal that could unlock the troubled talks. According to EU sources, the British demand for a 60% reduction in the catch by value in British waters had been reduced to 35%, far closer to the 25% reduction that Frost’s EU counterpart, Michel Barnier, had said he would be prepared to accept. Boris Johnson has also accepted a five-year phase-in period for the new arrangements, with a compromise also likely on the application of tariffs or export bans on goods where fishing access changes after the phase-in period, it is understood. Where the quota share is reduced, an independent arbitration panel will deduce the cost and allow either side to levy tariffs on goods. According to sources briefed on the terms, there will also be a termination clause should the reduction in access be judged to be egregious, opening up a fresh negotiation on all aspects of the trade deal. UK sources declined to comment. Diplomats from the major fishing member states were sceptical on Monday evening that the offer would be acceptable in full. “Paris is key,” said one senior diplomat. “It is not enough – but it may be enough to unlock things.” On Monday, France’s European affairs minister, Clément Beaune, said France would be vigilant about the UK’s proposals, with concerns in Paris that the UK has not done enough on the other key sticking point of committing to a “level playing field” in a trade in goods. “There have been successive proposals from the UK, sometimes on fishing, that don’t respond to European priorities and demands,” Beaune said. “Difficulties remain, in the fishing sector, but not only, so it would be an error of judgment and unacceptable stigmatisation to say that a few countries or a few sectors are blocking.” The development came as Downing Street rejected calls from some Conservative MPs and the mayor of London to consider extending Brexit talks beyond the new year, saying any trade deal had to be in place and approved before 31 December. Johnson’s spokesman also dismissed the idea of allowing MPs to ratify a trade deal retrospectively as time was too short, saying the Commons would have a vote on any agreement before it came into force. Some Conservative MPs argued on Monday that with the UK still reeling from the coronavirus pandemic and freight already disrupted by a halt imposed by France due to the spread of a fast-transmitting variant of Covid, leaving without a trade deal on 1 January should be avoided. Tobias Ellwood, the former defence minister, tweeted: “Let Brexit trade talks continue. These are far from ideal conditions to rationally determine our future prosperity and security terms. If there’s no deal by new year let’s do what’s best for the UK and pause the clock.” Simon Hoare, the North Dorset MP, tweeted that it was “time for maturity”, saying: “There’s no parly time to scrutinise and agree a deal, and daily clarity of the dangers to our already pressured economy of no deal is alarming.” In a statement, Sadiq Khan, the mayor of London, said the idea of leaving the EU without a trade deal “was reckless even before the latest surge in Covid cases” and should not be allowed to happen. However, the Labour leader, Keir Starmer, declined on Monday to back a possible extension, saying only that he wanted Johnson to deliver a deal this week. Asked following a speech on devolution if he agreed with the calls, Starmer said: “I don’t want an extension. I want the deal. The prime minister said he had an oven ready deal … I say to the prime minister, ‘Get on and deliver the deal you promised.’” Speaking after his first major policy speech on the union, in which he pledged to “make devolution a reality” under a Labour government, Starmer added: “It would be far better for the government to get the deal over the line today, tomorrow or some time this week.” Johnson will face fury from Brexit-minded backbenchers if he does agree to any delay. His spokesman said this would not happen. “Our position on the transition period is clear. It will end on 31 December. That remains our position,” he said. “We obviously need to ratify any agreement ahead of 1 January, which means that time is in short supply.” The spokesman ruled out the idea of retrospective parliamentary approval: “We’ve said before that we will need to ratify any agreement ahead of 1 January. The leader of the house made it clear that we would recall parliament in order to give MPs a vote on the necessary legislation.”