The Democratic Unionist Party (DUP) has clashed with other Stormont parties regarding the latest developments in attempts to get a Brexit deal.
German Chancellor Angela Merkel told Boris Johnson a deal based on the UK’s latest proposals was “overwhelmingly unlikely,” a No 10 source said.
The source also claimed she said a deal would never be possible unless Northern Ireland stayed in a customs union.
The DUP said it will not accept that, but other NI parties backed Mrs Merkel.
Last week, the UK published new proposals designed to replace the backstop in the original withdrawal agreement, which would have kept the UK in a temporary customs territory with the EU.
Mr Johnson had rejected the backstop as “anti-democratic”, putting forward a plan to take the whole of the UK out of the customs union.
This would mean a new customs border between Northern Ireland and the Republic of Ireland with new requirements for cross-border traders.
The government has said it believes the impact of this can be minimised with any checks taking place away from the border.
Has hope of a Brexit deal died?
By Jayne McCormack, BBC News NI political reporter
Given the ramped-up political blame game that seems to have been taking place in recent days, it’s perhaps not surprising that this is where things have gotten to.
The DUP remains firmly on the side of Number 10, insisting detail from the phone call proves the EU wants to keep Northern Ireland in a customs union “forever”.
Compare that with what the Irish government and EU say about needing fair proposals from Downing Street and a “willing” negotiating partner.
It would seem the obstacles are intractable – but don’t rule anything out yet.
Deal, delay and no-deal are all still possible options, much to the concern of other Stormont parties and businesses in Northern Ireland waiting for a clear way forward.
The Irish government and EU had not reacted positively to the proposals and said nothing yet had been put forward that fulfilled the objective of the backstop.
On Tuesday, DUP leader Arlene Foster said the reported comments from Mrs Merkel revealed that the EU is “not interested” in a negotiated outcome.
“The prime minister’s proposals have flushed out Dublin’s real intentions to trap Northern Ireland in the EU customs union forever, where Dublin rather than the United Kingdom’s elected representatives would be in the driving seat,” she said in a statement.
“We will not accept any such ultimatum or outcome.”
Tánaiste (Irish deputy prime minister) Simon Coveney tweeted about the frustration across EU member states.
“We remain open to finalize a fair Brexit deal but need a UK government willing to work with EU to get it done,” he said.
However, SDLP leader Colum Eastwood said the detail of the phone call between the prime minister and German chancellor showed that EU leaders are “more in tune” with people in Northern Ireland than Downing Street or the DUP.
“Angela Merkel is right. Retaining membership of the customs union and the single market is the only solution that prevents a hard border on this island,” he said.
“People here voted to remain in the customs union, we voted to retain the benefits of single market membership.
“The British government, aided and abetted by the DUP…should set aside the Downing Street war games and finally listen to what people here are saying.”
EU Council President Donald Tusk tweeted in response to the claim by the No 10 source, saying winning “some stupid blame game” was not what was at stake.
Ulster Unionist Party leader Robin Swann said Northern Ireland sits on the brink of a no deal disaster.
“It is another week where politicians in the EU and our own government are treating Northern Ireland like a chess piece in a very high risk game,” he said.
“We sit on the brink of economic disaster for Northern Ireland as we edge closer to no-deal, yet the UK government is more interested in a game of ‘he said, she said’ than producing a viable alternative.”
Meanwhile the Northern Ireland secretary has moved to distance himself from a Downing Street briefing about the current state of the Brexit negotiations.
In the piece, published in the Spectator, the source claimed EU countries that supported another extension to the Brexit deadline would go to “the bottom of the queue” on future co-operation including on defence and security matters.
But Mr Smith tweeted that “any threat on withdrawing security co-operation with Ireland is unacceptable”.