EU's Michel Barnier warns 'just a few hours' left to strike Brexit trade deal

EU chief negotiator Michel Barnier has warned there are "just a few hours" left to strike a post-Brexit trade deal with the UK, as the two sides stand at the "moment of truth".

As talks resumed on Friday, Mr Barnier said there was a chance of getting a deal in time for the end of the transition period on December 31, but said the path to a breakthrough was "very narrow".

His warning came after Boris Johnson told European Commission president Ursula von der Leyen the EU must "significantly" shift its stance on fishing, for an agreement, as the brinkmanship continued.

The EU set the latest deadline that an agreement must be ready by Sunday night to have enough time for MEPs to ratify it, while the House of Commons has been warned it may need to to hastily return from Christmas recess to vote on a deal.

"It's the moment of truth," Mr Barnier told the European Parliament in Brussels.

"We have very little time remaining, just a few hours, to work through these negotiations in useful fashion if we want this agreement to enter into force on January 1.

"There is a chance of getting an agreement, but the path to such an agreement is very narrow."

European Commission's Head of Task Force for Relations with the United Kingdom Michel Barnier, centre, arrives to the main chamber of the European Parliament in Brussels. Picture: AP Photo/Francisco Seco

He said he was being "frank with you and open and sincere" when he said that he was unable to say what the result will be from the "last home straight of negotiations".

The Prime Minister and Ms von der Leyen took stock of negotiations in a call on Thursday evening.

The EU chief acknowledged "big differences" remained between the two sides and stressed that "bridging them will be very challenging".

Mr Johnson tweeted after the call to say he told Ms von der Leyen that "time is short and the EU position needed to change substantially".