Despite what was dubbed as a “constructive and friendly” meeting between Theresa May and Jean-Claude Juncker last night, the official said EU chiefs are frustrating talks as they are not willing to strike a deal.
Without a clear sign negotiations will progress, the entire process could collapse, they said.
And Mrs May took a risk by promising to pay into the EU budget and settle the divorce bill when she spoke in Florence, the same official told Bloomberg on the promise of anonymity.
However, the Brexit department defended the negotiations and said they are making progress.
The department said: “We are making real and tangible progress – though we hope that the 27 will use the October Council the week to give Michel Barnier the means to make further steps.
“We are taking forward these negotiations in a constructive and responsible way”.
Mrs May had a working dinner with the European Commission President Jean-Claude Juncker yesterday in a bid to improve relationships between Brussels and the UK.
After the meeting, the Prime Minister and Mr Juncker said in a joint statement that “these efforts should accelerate over the months to come”.
They also said: “The working dinner took place in a constructive and friendly atmosphere”.
The two sides have until March 2019 to establish a deal on their future trading relationship and the divorce terms.
The talks have reached a deadlock over three topic for negotiation – the amount the UK owes the EU when it leaves, the future rights of the EU citizens in the UK and UK citizens living in the EU, and what happens on the Northern Ireland border.
The UK is making contingency planning in case talks collapse and the UK leaves without a deal in place.
This week, Foreign Minister Boris Johnson said: “It’s ready for the great ship to go down the slipway and onto the open sea and for us to start some serious conversations about the future and the deep and special relationship we hope to construct”.