LONDON (BLOOMBERG) - The negotiations between Britain and the European Union over their future relationship are lurching toward a crisis after European Union leaders told Boris Johnson he must make concessions only hours before the prime minister is due to decide whether to walk away.

David Frost, the UK's chief Brexit negotiator, said he was "surprised" and "disappointed" at the warning, which came during a summit of EU leaders on Thursday. He said that Johnson, who has threatened to quit the negotiations at the end of this week if a deal can't be struck, would respond on Friday (Oct 16).

The spat is a sign that the seven months of negotiations between the two sides over their future relationship are heading for what could be a key turning point.

Without an accord, millions of businesses and consumers will face additional costs and disruption when Britain leaves the single market on Dec 31.

"If conditions aren't met, it's possible we won't have an agreement," French President Emmanuel Macron said as he arrived at the summit in Brussels. "We are ready for that." But there is still time - just - for the two sides to clinch a deal.

The UK had been calling on the EU to agree to round-the-clock negotiations to push through an agreement within the next two weeks.

But for Johnson to be persuaded to stay at the table, negotiators had wanted to see positive signs from the bloc, including a signal it was willing to intensify negotiations - something they pointedly refused to do.

"Surprised EU is no longer committed to working "intensively" to reach a future partnership," Frost said in a tweet. "Also surprised by suggestion that to get an agreement all future moves must come from UK. It's an unusual approach to conducting a negotiation."

While the summit's final communique removed the word "intensification" that had appeared in earlier drafts, EU chief negotiator Michel Barnier did use the term to characterise the discussions he plans over the coming weeks. That may still not be enough for Johnson.

TALKS 'AREN'T OVER'

"I can't say as we stand here that we'll necessarily get a deal - we have prospects of a deal," Barnier told reporters after meeting with EU leaders, adding that, as far as he's concerned, talks will continue in London next week and Brussels the week after.

"We shall remain available until the last possible day - the negotiations aren't over." While the UK thinks it has gone as far as it can, and wants the EU to compromise, leaders from the bloc insisted that the onus is on the British government.

It wants the UK to make concessions on state aid, limiting the subsidies government can hand out to businesses, before it contemplates its own compromises on fishing.

European officials brushed off Frost's complaints and insisted they won't persuade the bloc to shift its stance, and several voiced irritation, asking not to be identified because of the sensitivity of the negotiations. Two said they judged the comments were aimed at Frost's domestic audience and two others said they might serve to harden the EU's position.

The leaders said the EU and UK should "continue negotiations in the coming weeks" and called on the UK to "make the necessary moves to make an agreement possible," according to the summit communique.

Johnson will assess the mood of the EU based on signals from leaders and the content of their discussion, according to a person familiar with the UK position who asked not to be identified because the deliberations are private. Prior to the summit, Frost was expected to advise Johnson not to abandon talks, the person said.