The EU Commission says it will start legal action against Boris Johnson’s bid to potentially override parts of the Brexit deal.
Brussels claims the prime minister is breaching the “good faith” promise both sides signed up to in the withdrawal agreement struck and passed by parliament last year.
President Ursula von der Leyen said given Mr Johnson has “failed” to heed her warning, “infringement proceedings” are being launched.
Number 10 now has until the end of October to respond.
A government spokesperson said a reply will be sent “in due course”.
It marks an escalation in tensions as the deadline looms for negotiators to hammer out a trade deal.
The UK left the EU on 31 January but is in a transition period meaning it is following many of the same rules until the end of 2020.
Talks are now ongoing over the future relationship but if no breakthrough is reached by mid-October, then the prospect of a no-deal divorce will rear its head again.
Mr Johnson provoked the fury of former Conservative prime minister Theresa May and other backbenchers with a controversial plan for what should happen in that scenario.
He is pushing through legislation that would – by the government’s own admission – break international law, called the “Internal Market Bill“.
It will let ministers hand themselves the power to determine rules on state aid and goods travelling between Northern Ireland and Great Britain.
Despite a small Tory rebellion, the bill passed the Commons with ease earlier this week and will go on to face debates and votes in the House of Lords.
A government spokesperson defended the bill in light of the EU’s legal threat.
“We need to create a legal safety net to protect the integrity of the UK’s internal market, ensure Ministers can always deliver on their obligations to Northern Ireland and protect the gains from the peace process,” they said.
The three things Brussels’ legal action means
Analysis by Adam Parsons, Europe correspondent
For the EU, this isn’t just about the legal action, but about the signals that it sends across the Channel.
Firstly, it is clear warning that, as long as the Internal Market Bill survives, a trade deal won’t be passed.
The European Parliament has already said it would block a deal on those terms, but there are plenty who shrugged that off. But if the Commission is making the same threat, it carries more weight.
Secondly, it suggests unity. This legal action required support from across the 27 EU member states.
Last year, every country seemed to have a different take on Brexit; now, with so much else to worry about, the EU seems to be much more unified in its approach.
Just about every EU diplomat here considers the withdrawal agreement to be close to a sacred text.
And thirdly, Ms Von der Leyen’s words were a tacit statement that Europe is prepared for talks to fail.
But – and it’s a big but – there is a ripple of optimism in Brussels that progress has been made in recent days.
Not, they say, because the EU has been intimidate by the hated Internal Market Bill but because the British government is showing signs of changing its position on state aid rules.
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