As part of a new push for an agreement, ministers are said to no longer see the role of the European Court of Justice (ECJ), once a totemic issue, as a major roadblock.
UK officials have instead conceded that Luxembourg-based judges will have to be the final arbiter of EU laws that apply inside Northern Ireland.
They will seek to insert a layer of protections within an “overarching framework” to prevent the European Commission from referring disputes straight to its court.
Instead, any disagreements would go before an independent panel, which would have to ask the ECJ’s permission if they concerned Brussels regulations.
When the Protocol was signed, around 300 EU rules were said to apply in Northern Ireland but the list has grown since, a source briefed on the talks said.
British officials confident of deal
British officials are confident a deal can be struck and have already begun writing their sales pitch for the Brexit hardliners in the ERG and the DUP.
They have accepted that the Protocol itself will not be changed but want to sign a declaration that would sit above the current text.
The document would spell out how the two sides had agreed to drastically reduce red tape on goods travelling from Great Britain to Northern Ireland.
DUP and ERG put on united front
DUP and ERG sources suspect ministers are already trying to lay the groundwork for a compromise by playing them off against each other. But the two groups have put on a united front.
David Jones, deputy chairman of the ERG, and Sammy Wilson, the DUP’s spokesman on Brexit, have warned they will not accept a “fudge”.
“The ultimate test of any deal will be whether it ends Northern Ireland’s semi-colonial status as a client of the EU, automatically accepting EU laws without any input from elected representatives,” the pair said.
“That is a fundamental problem that simply can’t be fudged. A deal should address not only the symptoms of the Protocol by reducing the level of checks.
“It must also resolve the root cause of those checks, namely the fact that Northern Ireland is trapped in EU single-market rules, semi-detached from the rest of the UK, and therefore subject to the constant threat of future regulatory divergence with Great Britain.
“Ultimately, an agreement that serves merely the short-term interests of the UK and EU but does not represent a lasting settlement between both those parties and all traditions in Northern Ireland will be futile. Unionist politicians won’t accept it. It will be a failure in statecraft of historic proportions.”
‘Shoulder to shoulder’
Sir Jeffrey Donaldson, DUP leader, addressed an ERG gathering in Westminster last week at which the two factions agreed to stand “shoulder to shoulder”.
A senior member of the ERG said: “We are in lockstep with our DUP friends on this and in particular their determination not to re-enter the NI Executive, unless and until all EU law is expunged from Northern Ireland.”
British and EU officials are still locked in intensive talks, which are being led by James Cleverly, Foreign Secretary, and the bloc’s Maros Sefcovic.
A Government spokesman said: “As we’ve said repeatedly, any solution on the Protocol must address the range of issues including governance and the democratic deficit on how new EU laws apply in NI.”