British PM faces another Brexit revolt

British Prime Minister Theresa May has challenged the European Union to break the "impasse" in Brexit negotiations, fighting back after the bloc threw divorce negotiations into doubt by labelling May's blueprint for leaving the bloc unworkable.

With British newspapers declaring that May had been "humiliated" by EU leaders at a summit in Salzburg, Austria, the prime minister used a televised statement in 10 Downing St on Friday to tell the bloc, essentially, to put up or shut up.

"At this stage in the negotiations, it is not acceptable to simply reject the other side's proposals without a detailed explanation and counter proposals," May said.

Declaring that "we are at an impasse", May said the EU must lay out "what the real issues are and what their alternative is".

"Until we do, we cannot make progress," she said.

The pound fell on May's comments, which seemed to make the prospect of an economically disruptive "no deal" Brexit more likely.

The currency was trading down a sharp 1.5 per cent on the day at $US1.3066 ($A1.7911).

May's combative statement followed a fraught Salzburg summit, at which European Council President Donald Tusk said parts of the UK's plan simply "will not work".

A rattled May insisted that her plan was the only one on the table - and that Britain was prepared to walk away from the EU without a deal if it was rejected.

"Throughout this process, I have treated the EU with nothing but respect," she said on Friday.

"The UK expects the same. A good relationship at the end of this process depends on it."

The rocky EU summit dashed British hopes of a breakthrough in stalled divorce talks, with just six months to go until Britain leaves the bloc on March 29.

The judgment of British newspapers was brutal.

The broadly pro-EU Guardian said May had been "humiliated."

The conservative Times of London said: "Humiliation for May as EU rejects Brexit plan".

The Brexit-supporting tabloid Sun branded bloc leaders "EU dirty rats", accusing "Euro mobsters" Tusk and Macron of "ambushing" May.

May's "Chequers plan" - named for the prime minister's country retreat where it was hammered out in July - aims to keep the UK in the EU single market for goods but not services, in order to ensure free trade with the bloc and an open border between the UK's Northern Ireland and EU member Ireland.

EU officials have been cool on the plan from the start, saying Britain can't "cherry-pick" elements of membership in the bloc without accepting all the costs and responsibilities.

In her statement on Friday, May said she would "never agree" to "any form of customs border between Northern Ireland and the rest of the UK".

Arlene Foster, the head of Northern Ireland's Democratic Unionist Party which supports May's government, welcomed the Prime Minister's tough stance against "disrespectful, intransigent and disgraceful" behaviour by the EU.

She said her party would veto any attempt to introduce a new regulatory barrier between the region and the rest of the United Kingdom.

Scottish First Minister Nicola Sturgeon called May's statement "dreadful" and warned that May's party would pay a high political price if there was "no deal".

In response to May's statement, the Confederation of British Industry and other business bodies said they wanted to see constructive dialogue, not rhetoric.

May hinted there could be a way forward, saying there needed to be "serious engagement" on resolving the two big problems in the negotiations - trade and the Irish border.

"We stand ready," she said.