The EU and Britain looked to be close to nailing down an elusive Brexit deal late Wednesday, just in time to be submitted to a key European summit. If a text emerges forming the basis of a legal treaty, Britain could be headed for a managed withdrawal from the European bloc it has been part of for nearly half a century.

Otherwise, the Brexit crisis that has sapped UK politics for the past three years could worsen, and British Prime Minister Boris Johnson could make good on a vow to take his country out of the EU without a deal in two weeks' time.

"I'd like to believe a deal is being finalised," French President Emmanuel Macron said alongside German Chancellor Angela Merkel in southern France as negotiators in Brussels worked frantically.

European sources warned it was not a done deal, with one stressing "talks continue" and another declaring: "There is still no white smoke."

"We're almost there," the second one said, adding: "Everything is resolved except the application of VAT in Northern Ireland."

Macron, Merkel and other EU leaders will head to Brussels on Thursday with the aim of deciding whether to give the go-ahead to officials to draw up a final withdrawal treaty with Britain.

But EU negotiator Michel Barnier and European diplomats need to know if Johnson can sell the draft deal at home.

"The basic foundations of an agreement are ready and in theory tomorrow (Thursday) we could accept this deal with Great Britain and avoid the chaos and the misfortune linked to an uncontrolled, chaotic exit," Donald Tusk, president of the European Council, said on Poland's TVN24 news.

In London, Johnson hosted a cabinet meeting at which ministers were told there was "a chance of securing a good deal but we are not there yet and there remain outstanding issues", a Downing Street spokesman said.

Copyright Agence France-Presse, 2019