It appears an agreement on the Irish border could be within touching distance.
A government official told an event in Brussels that an agreement is "very close" with a deal possible within hours.
The official said border talks were "moving quite quickly," adding that the Government was "going to work over the next couple of hours with the UK government to close this off."
Irish, European and British officials are reportedly examining a new draft of text on the agreement reached earlier this week.
It is believed the new wording was put forward by London as the British Prime Minister Theresa May attempts to keep the DUP onside – while also placating Irish demands that there will be no return to a hard border following Brexit.
The EU Commission says talks aimed at reaching a deal will continue through the night.
Meanwhile, the European Council President Donald Tusk has said he will make a statement on Brexit talks early tomorrow morning.
.@JunckerEU was on the phone with Taoiseach Leo Varadkar and then with @theresa_may. We are making progress but not yet fully there. Talks are continuing throughout the night. Early morning meeting possible with press/point thereafter. Tonight more than ever, stay tuned, gsms on.
— Margaritis Schinas (@MargSchinas) December 7, 2017
Negotiations have been ongoing all week in a bid to reach a deal on the border with Northern Ireland – allowing Brexit talks to go to the next stage.
Earlier, a Government spokesman said matters were being considered - hinting that a deal may be in the works.
It comes after the UK was handed a new deadline of Sunday to come up with a Brexit deal that can solve the border issue.
This afternoon, the European Commission said there was "no white smoke" regarding a deal – and warned that a solution must be found this week in order for talks to move on to the next phase.
Speaking to reporters in Brussels, EC spokesperson Margaritis Schinas said negotiators “stand ready to receive” the British Prime Minister Theresa May “at any moment in time when they are ready.”
He said any offer must come this week – up to and including Sunday.
European leaders must officially decide on Thursday and Friday of next week whether “sufficient progress” has been made on key issues in order to move the negotiations forward.
The British government still insists a deal is close, but the border remains the sticking point.
A last minute intervention from Northern Ireland’s DUP party on Monday scuppered an agreement between British and European negotiators that would have avoided any return to a hard border.
In a last-minute phone call, DUP leader Arlene Foster threatened to pull her party’s support for Mrs May’s Government claiming the deal would have created unacceptable regulatory divergence between Northern Ireland and Britain.
Mrs May spoke with the Taoiseach Leo Varadkar and the DUP leader Arlene foster by phone yesterday as she attempted to salvage a deal.
A Downing Street spokesperson has claimed an agreement is close – although Mrs May is aware that more needs to be done on the border issue.
"As the Prime Minister set out, we think we are close to an agreement but there is more work to be done. It's an ongoing process," said the spokesperson.
The Taoiseach has said he will look at any proposals with an open mind – but warned there is little wriggle room regarding what was agreed earlier this week.
Speaking in the Dáil, the Foreign Affairs Minister Simon Coveney said the core meaning of this week’s agreement needs to remain intact.
“We are now in a position whereby we need to find a way forward,” he said.
“Let me be very clear. The core issues that Ireland got agreement on at the start of this week are not changing and they are in the interests, as I say, of this island and the relationships on it north and south, east and west and between different communities and political parties.”
“We have maintained and will continue to maintain that position.”
Sinn Féin deputy leader Mary Lou McDonald called for a clear statement clear statement that the Government will not agree to anything which forces the North from the Customs Union and the Single Market.
“In the absence of that kind of clarity; in the absence of a deal that secures that very thing; then we are undoubtedly headed towards a border on the island of Ireland, the undermining of the Good Friday Agreement and everything else that might flow from that,” she said.
Minister Coveney noted that both sides are facing into “a sensitive negotiation at a very sensitive time” and insisted the Government would not say anything to “stoke up what is already a difficult relationship management exercise.”
He confirmed that the Government’s position had not changed, adding “we will not support anything that, in our view, risks the re-emergence of a hard border on the island.”
The DUP has insisted it will not support any deal that sets Northern Ireland on a different regulatory footing to Britain.
A new poll published this morning found that nearly 58% of people in Northern Ireland want to remain in both the Customs Union and the Single Market following Brexit.
75% believe EU standards should be maintained in the north post-Brexit.
Speaking to Belfast’s Q Radio this afternoon, Sinn Féin’s leader in the North Michelle O’Neill slammed the DUP approach and warned the party does not speak for the majority of people in Northern Ireland:
“The people here have voted last June – and they have again in this recent poll – they have said they want special status,” she said.
“There is growing support for special status.
“We are unique; we are different and that is what we need to see reflected in the negotiations.”
Earlier, Britain’s Foreign Secretary Boris Johnson insisted any deal must respect the promises made during the Brexit referendum campaign.
"It is very, very important that whatever happens now, whatever we agree; has got to be consistent with taking back control of our laws, of our borders and our cash," he said.
Without an agreement from EU leaders at next week's European Council summit, Brexit negotiations will not move on to trade talks before the New Year.
This is effectively the third time the UK has been given a deadline to come forward with concrete proposals.