Theresa May is returning to Brussels to seek legal assurances on the Brexit backstop amid signs she has persuaded key Tory eurosceptics to consider backing her Withdrawal Agreement.
Chancellor Philip Hammond indicated on Tuesday the Government has accepted the EU will not agree to replace the backstop arrangements for the Irish border with technological alternatives in time for Brexit on March 29.
But he said he hopes the technological solution contained in the so-called Malthouse Compromise will form part of negotiations over the following 21 months on the UK's future relationship with the EU.
After being briefed on developments in private talks with the PM, leading Brexiteers Jacob Rees-Mogg and Steve Baker appeared happy with this arrangement, declaring that the Malthouse proposals were "alive and kicking".
Mr Baker said it was now possible that Tory eurosceptics in the influential European Research Group, of which he is deputy chair, would back Mrs May's Withdrawal Agreement, after helping to vote it down last month.
"I'm hopeful that as the conversation moves forward with the EU and with the UK that we might get to a position where we can vote for the Withdrawal Agreement," Mr Baker said.
In a joint statement, Mr Baker and ERG chair Mr Rees-Mogg said: "We look forward to further precision about exactly what we will be asked to vote for.
Mr Hammond told the MakeUK dinner in London that the proposals in the Malthouse plan - drawn up by MPs from the Leave and Remain wings of the party - represented a "valuable effort" at finding a way to keep the Irish border open after Brexit, without a backstop.
But the Chancellor said it was clear the EU would not consider replacing the backstop with such an alternative arrangement immediately.
He added: "It should be a major ongoing strand of our work, continuing at pace during the Implementation Period - one in which I hope and expect the EU will take an active part."
The developments came as Mrs May prepared for a crucial meeting with European Commission president Jean-Claude Juncker in Brussels.
Mr Juncker has said that he does not expect a "breakthrough" in talks at which Mrs May is expected to request legally-binding assurances that the backstop will not extend indefinitely.
She believes that this is the key to winning the support of the House of Commons for her deal, and seeing off efforts to extend the negotiation period in a series of votes expected on February 27.
Mr Hammond said that legally-binding changes to ensure the backstop does not become permanent "would deliver the core of a majority for a deal in the House of Commons".
A senior adviser to EU negotiator Michel Barnier said there was "zero appetite" in the capitals of the 27 remaining members to renegotiate the agreement reached with the UK last November.
Australian Associated Press