Brexit negotiators are close to an agreement on the Irish border according to the British Prime Minister.
It comes after European Council president Donald Tusk said the leaders of the remaining 27 EU countries have agreed to begin preparations for the second phase of negotiations - which will focus on the future trading relationship between the UK and the EU.
Europe has insisted throughout the process that talks cannot move forward unless "sufficient progress" is made on three key issues - the Irish border, citizen's rights and the Brexit bill.
In a speech this morning, Theresa May insisted that milestone was now "within touching distance."
She claimed that there are only "small issues" left to resolve on citizens rights adding that both sides had rejected the idea of a hard border in Ireland.
"It is vital that joint work on the peace process is not affected in any way - it is too important for that," she said.
"Both sides agree that there cannot be any physical infrastructure at the border and that the Common Travel Area must continue.
"We have both committed to delivering a flexible and imaginative approach on this vital issue."
In a speech last night, she warned EU leaders of the political difficulties she is facing in the UK and urged them to help deliver a deal she can defend domestically.
In a statement issued ahead of Mrs May's speech, EC president Donald Tusk said European leaders had been given the "green light" to begin preparing for the second phase of talks.
However, leaders have insisted that there is still not enough progress to officially begin the next round.
This afternoon, they are expected to formally reject a proposal to move on to the second phase - however, Mr Tusk insisted he is still working on the assumption a final Brexit agreement will be reached.
The Taoiseach Leo Varadkar is among the leaders attending the European summit in Brussels.
Following a working dinner last night he said Mrs May's contribution to the discussions was "very positive."
He noted that she had strengthened her language on avoiding a hard border - but urged the UK to provide details on how it proposes to maintain an infrastructure-free border while exiting the customs union and the single market.
"The language was the right language," he said. "It was very strong."
"She specifically referenced the unique situation of both Ireland and Northern Ireland which I felt was very positive and she strengthened her language on the border - she said the UK would not accept a physical border on the island of language.
"So again, very positive language - if anything a strengthening of that language - but once again we need to see that backed up by detail.
He said Ireland would miss the UK following Brexit - adding that Mrs May made some "very positive interventions" regarding digital tax at the meeting yesterday adding that her stance was "very much in line with our thinking.
Ireland is calling for any changes to the taxation of digital firms like Google, Amazon and Facebook to be introduced as part of a global approach rather - rather than as an EU-only initiative.