A European court ruling on fishing rights that threatens to derail Sir Keir Starmer's Brexit reset is expected on Monday.
The tribunal will decide whether the UK must drop its ban on sand eel fishing designed to protect endangered puffins after it was challenged by the EU.
The ruling comes at a critical moment, just weeks before a landmark UK-EU summit on May 19 where the Prime Minister hopes to secure a security and defence pact.
Whichever way the court rules, it threatens to disrupt highly sensitive negotiations between London and Brussels over fishing rights.
Sir Keir Starmer's Brexit reset is expected on Monday
PA
The current UK-EU agreement on European trawlers' access to British waters expires in 2026.
If the tribunal rules against the UK, forcing Britain to drop its ban, it could make it politically difficult for Starmer to compromise on fishing and other areas.
If it rules against the EU, coastal countries with large fishing industries may drag the issue into wider negotiations.
The EU, led by coastal member states such as France and Denmark, has been insisting that the UK must agree a new deal on fishing rights to secure a defence deal with Brussels.
This demand comes against the wishes of other EU members like Germany and Poland.
The sand eels ruling will arrive just three weeks before the summit where Starmer is attempting to finalise a defence agreement.
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The agreement would reportedly grant the EU a long-term deal on fish accessGettyThis timing creates a significant challenge for the Prime Minister's Brexit reset strategy.
Starmer is not expected to agree to giving the EU more catch, fearing political backlash in the UK.
However, he is willing to make an outline commitment to maintaining existing quotas for several years rather than returning to annual negotiations.
The PM maintains a defence pact should not be conditional on fishing arrangements.
He is expected to make this case when meeting European Commission President Ursula von der Leyen in London on Thursday.
An EU source described the meeting as "clearly an important stepping stone towards the summit".
A European diplomatic source said the UK will likely need to offer "a bit more" than an outline commitment on fishing, "especially if a defence and security deal is struck at the same time".
The EU will also push for a "clear intention" to strike a youth mobility deal at the summit.
The EU, led by coastal member states such as France and Denmark, has been insisting that the UK must agree a new deal on fishing rights to secure a defence deal with Brussels
PACabinet ministers remain divided on the issue, with Rachel Reeves and Brexit reset chief Nick Thomas-Symonds reportedly favouring a youth mobility deal.
Home Secretary Yvette Cooper is said to be sceptical due to her goal of cutting immigration.
Sir Nick Harvey, the Liberal Democrat former armed forces minister, welcomed potential compromise on youth mobility.
The European Movement CEO said: "The news that the Government seems to be seriously considering a youth mobility scheme with the EU has been a long time coming."
The Prime Minister's spokesman responded by reiterating red lines: "No return to freedom of movement, the customs union or single market."
He added that it is "critical we get net migration down."
