Boris Johnson will not give in to demands to extend the Brexit transition period despite the coronavirus crisis, Downing Street said.
The UK leaves the single market and customs union on December 31 and will face tariffs and quotas on trade with the European Union unless a deal is reached.
But talks in Brussels remain difficult with “significant differences in key areas”, including fishing rights and rules on maintaining fair competition.
Scotland’s First Minister Nicola Sturgeon and London Mayor Sadiq Khan have led calls for the deadline to be extended while the Government battles the spread of the new coronavirus variant.
But Downing Street rejected the call and dismissed the idea of a temporary “stand still” period maintaining current arrangements beyond the end of the year.
And Labour leader Sir Keir Starmer also declined to back calls for an extension, instead urging the Prime Minister to strike a deal with Brussels.
The Prime Minister’s official spokesman said “time is obviously in very short supply” to get a deal done and ratified by January 1 with the UK prepared for World Trade Organisation (WTO) terms if there is no agreement with the EU.
He added: “We will need to ratify any agreement ahead of January 1. The Leader of the House made clear that we would recall Parliament in order to give MPs a vote on the necessary legislation.”
Asked if there could be a “stand still” agreement to maintain current arrangements until a deal is in place, the spokesman said: “We have been clear on this point that we will either leave the transition period on December 31 with a free-trade agreement or we will leave with Australia-style WTO terms. That remains the case.”
Trade has already been disrupted after France banned hauliers travelling from the UK due to fears over the spread of the more infectious strain of coronavirus.
But Transport Secretary Grant Shapps said firms already knew that change was coming after December 31 and had been told to plan for it.
Extending the transition period would “add fuel to the fire” by creating extra uncertainty, he suggested on BBC Breakfast.
Mr Shapps said that measures such as the use of the disused Manston airfield as a lorry park, which had been planned as a post-Brexit contingency, were now being used as a result of the coronavirus disruption.
Talks on a post-Brexit trade deal are expected to continue this week.
Lead negotiators Michel Barnier and Lord Frost were continuing talks on Monday but the discussions over the weekend were described as “difficult”.
The key issues of fisheries and the so-called “level playing field rules” on state aid for business remain the major stumbling blocks.
The European Parliament had said the talks needed to be concluded by Sunday evening if it was to ratify any deal before the current Brexit transition ends on December 31.
However, if there was to be a deal, under EU rules it could be provisionally signed off by leaders of the 27-member bloc with ratification delayed until 2021.
Ms Sturgeon said the Prime Minister should try to get an extension to the Brexit transition period because of the discovery of the faster-spreading coronavirus strain.
She tweeted: “It’s now imperative that PM seeks an agreement to extend the Brexit transition period.
“The new Covid strain – & the various implications of it – means we face a profoundly serious situation, & it demands our 100% attention.
“It would be unconscionable to compound it with Brexit.”
Her view was echoed by Mr Khan.
He said: “Securing our key supply chains and fighting the coronavirus pandemic requires the full and undivided efforts of ministers more than ever before.
“Risking the chaos and uncertainty of a no-deal Brexit was reckless even before the latest surge in Covid cases and the worrying news about this latest strain.
“With the virus spreading rapidly and our hospitals increasingly stretched, the only thing the country should be concentrating on is fighting the virus.”
But Labour leader Sir Keir did not back the calls for an extension, instead calling on the Prime Minister to deliver a deal.
“Get that deal over the line today or tomorrow, don’t delay,” he said. “People were promised a deal and you must deliver that deal”.