The International Trade Secretary said a final position on Ireland could not be reached until it was known what the "end state" of the UK-EU relationship after Brexit would be.

It comes as Dublin put fresh pressure on the Government and called on Theresa May to accept a solution which would see either the whole of the UK or just Northern Ireland remain in the single market and customs union.

The Irish government has denied threatening to derail the Brexit negotiations but insisted it would remain "resolute" in its stance over the border row with the UK.

Liam Fox said: "We don't want there to be a hard border but the UK is going to be leaving the customs union and the single market.

"We have always had exceptions for Ireland, whether it's in our voting rights, our rights of residence in the UK, we have always accepted a certain asymmetry and that will have to be part of whatever agreement we come to with the European Union but we can't come to a final answer to the Irish question until we get an idea of the end state.

"And until we get into discussions with the EU on the end state that will be very difficult, so the quicker that we can do that the better and we are still in a position where the EU doesn't want to do that."

A former Northern Ireland Secretary blasted the furore surrounding the Irish border as an attempt to create an exaggerated disaster out of a "small problem".

Owen Paterson hit out at claims the fate of the Irish border could spark revive old conflicts and trigger a political crisis.

He said talk of a crisis surrounding the situation was a complete "myth" and amounted to "blackmail" from European leaders.

He pointed out that several borders already exist between Northern Ireland and the Republic, and a post-Brexit electronic border was just a matter of will from both sides.

The Tory Brexiteer responded to a report from Irish MEP Mairead McGuinness who urged Britain to stay in the single market for the sake of Ireland.

Mr Paterson was baffled by this request and later branded this "absurd" since only five per cent of Northern Irish trade goes across the border.

He told the BBC: "There is already an existing border: there is a currency border, now a euro-sterling border, there is a VAT border, an income tax border, a corporation tax border.

"No-one has ever said that this has been a problem. This thing is a complete myth. No-one wants a physical border, neither the North or the South.

"Even in the Brexit referendum campaign, we made it clear there are electronic measures existing that can be made to work if there is a will on both sides of the border."

Mr Paterson took Irish MEP Mairead McGuinness to task over her emergency request for the UK to remain in the single market to ease border tensions.

Mr Paterson blasted the Irish politician, who also serves as Vice-President for the European Parliament, saying: "The idea Northern Ireland's going to be taken out of the single market of the UK where it does 87 per cent of its trade is absurd."

He said: "The border has a very small amount of trade. Only five per cent is across the border. 

"It is really very irresponsible of politicians to make a statement like that, saying they are going to force and blackmail the UK into giving a special status for Northern Ireland outside the rest of the UK.

"It would be very easy to license the tankers that cross the border every day as authorized economic operators.

"They would be recognised and allowed to pass, and all invoices would be done electronically.

"It really is just a very small problem that can be resolved if there is a will."