European Council President Donald Tusk has said he recommends EU leaders approve the outcome of Brexit negotiations on Sunday.

The meeting had been in doubt after Spain threatened to call off the summit, unless an agreement was made with the UK over Gibraltar.

However a draft document seen by Reuters shows the European Union will declare in approving the Brexit deal that any future arrangements regarding Gibraltar must be discussed directly with Madrid.

"After the United Kingdom leaves the Union, Gibraltar will not be included in the territorial scope of the agreements to be concluded between the Union and the United Kingdom," it said.

"However, this does not preclude the possibility to have separate agreements between the Union and the United Kingdom in respect of Gibraltar... those separate agreements will require a prior agreement of the Kingdom of Spain."

It came after Mr Tusk spoke with Spanish Prime Minister Pedro Sanchez by phone on the eve of the crucial Brexit summit.

Spanish Prime Minister Pedro Sanchez answers questions during a press conference in Rabat, Morocco | Image: AP/Press Association Images

 Mr Tusk has confirmed Sunday's summit will go ahead.

He said in a statement: "We intend to work resolutely towards building the best possible relationship with the UK after Brexit, as friends and partners.

"And we will have around two years to work out and agree a precise framework for such cooperation.

"And if, in spite of our best efforts, additional time is needed to negotiate the future relationship, an extension of the transition period by up to two years will be possible."

I will recommend that we approve on Sunday the outcome of the #Brexit negotiations. No one has reasons to be happy. But at least at this critical time, the EU27 has passed the test of unity and solidarity. https://t.co/N3EexasL2n

— Donald Tusk (@eucopresident) November 24, 2018

"During these negotiations, no-one wanted to defeat anyone.

"We were all looking for a good and fair agreement. And I believe that we have finally found the best possible compromise.

"Given all of the above, I will recommend that on Sunday we approve the outcome of the Brexit negotiations.

"And although no-one will have reasons to be happy on that day, there is one thing I would like to stress: at this critical time, the EU27 has passed the test of unity and solidarity."

European Commission President Jean-Claude Juncker (right) shakes hands with British Prime Minister Theresa May during a meeting in Brussels | Image: Ye Pingfan/Xinhua News Agency/PA Images

Meanwhile British Prime Minister Theresa May is in Brussels in a bid to finalise the withdrawal agreement before the summit.

She is meeting EU Commission President, Jean-Claude Juncker, while still facing significant opposition at home and abroad.

Mrs May's spokeswoman said she would work with the Spanish government on Gibraltar.

With four months left until Britain leaves the EU, the summit is seen as a crucial step.

DUP threats

Meanwhile the DUP is threatening to collapse Mrs May's Westminster government if the Brexit deal is passed there.

Party leader Arlene Foster told BBC Radio Ulster's Inside Politics: "If she is successful in parliament, and there is no evidence that she is going to be successful in parliament, then of course we will have to revisit the confidence and supply agreement.

"That agreement was about giving national stability, it was acting in the national interest and delivering on Brexit.

"If this is not going to deliver on Brexit then of course that brings us back to the situation of looking at the confidence and supply agreement, but we are not there yet and we are not going to jump ahead until we see what happens in parliament."

The Northern Ireland party is holding its annual conference in Belfast on Saturday - with Boris Johnson as a special guest.

Extracts of Mrs Foster's speech, published ahead of the conference, focus on Brexit, the prospect of a better deal and her party's agreement at Westminster.

Mrs Foster will acknowledge Mrs May's efforts and describe her as "genuine", but she will conclude that the draft agreement "fails her own key commitments".

"The prime minister has not been able to guarantee an outcome that eliminates the risk of the introduction of the so-called backstop arrangements," she will say.

Acknowledging support for the draft deal from the business community in Northern Ireland, Mrs Foster will say she understands the position of those who seek certainty.

British Chancellor of the Exchequer Philip Hammond (centre) at Crown Plaza Hotel in Belfast with the DUP leader Arlene Foster (left) and deputy leader Nigel Dodds (right) | Image: Liam McBurney/PA Wire/PA Images

She will say: "But... we cannot wish away the fact that the draft withdrawal agreement contains arrangements which are not in Northern Ireland's long-term economic or strategic interests.

"The choice is not between this deal and 'no-deal', despite what the government spin machine may say.

"The reality is that if we are to secure a better outcome than is currently on offer, then the only option is to look beyond this current draft withdrawal agreement and work in the time ahead for an improved outcome."

On the issue of her party's agreement with Conservative government at Westminster, Mrs Foster will say the DUP has been "indispensable" in securing a majority on Brexit votes.

"But of course the confidence and supply deal is a two-way street. The government's commitments under it are clear, including on Brexit," she will say.

"Commitments freely entered into must be delivered and if they are not, then clearly, as we have shown, there are consequences.

"Our agreement is of course with the Conservative Party.

"It is incumbent therefore on all Conservatives in parliament who recognise the importance of continuing stability and who wish to see the government deliver its agenda to ensure it is honoured in full."

Additional reporting: Sean Defoe, Jack Quann and IRN