Bloomberg reported on Thursday that the two sides are preparing to enter the more intense phase of the long-standing negotiations as soon as next week, quoting people familiar with the matter.

"My understanding from my conversation with (European Commission) President (Ursula) von der Leyen is that they're not in the proverbial tunnel yet," Varadkar told reporters, referring to their phone call late on Wednesday.

"But she was very clear that she felt the best chance of success in these talks is that negotiators are given time and space and confidentiality to come to solutions."

(Reporting by Amanda Ferguson, writing by Padraic Halpin in Dublin, Editing by Kylie MacLellan)