The Prime Minister has repeatedly insisted there was a red line drawn over ECJ rule after Brexit as Brussels’ negotiators pushed for its authority to continue over EU nationals living in the UK.

Now it is said that the bloc’s negotiators will accept a 10 year sunset clause which will end the role of the ECJ in a bid to break a deadlock on Brexit talks.

It comes as Donald Tusk’s office has announced the European Parliament President will make an early morning Brexit statement on Friday.

Mr Tusk will make the statement at 6.50am GMT on Friday but his office refused to release further details.

Under the new compromise, Britain’s Supreme Court could refer a small number of cases regarding EU citizens for the Luxembourg court to rule on.

The arrangement will end in 2029, when British judges will have complete authority over UK laws.

However, Mrs May faces a backlash for her part in the compromise with Brexiteers insisting the court’s role must end the day Britain leaves the EU on March 29, 2019.

Veteran Tory Eurosceptic Sir William Cash said told The Sun: “Allowing the ECJ any role whatsoever is a mistake.

“It will spread its tentacles, like ectoplasm, and end up ruling on all manner of things. That’s what it has done ever since 1956.”

Earlier today the EU demanded a draft Brexit deal from Britain by Sunday if there is to be any hope of moving onto transition and trade talks at next week’s EU summit in Brussels.

The curious timing of Friday’s announcement suggests a deal could be on the table, and an early morning statement would give leaders across Europe an entire working day to come to terms with whatever Mr Tusk has to say.

And his statement, shortly before the markets open, suggests Mr Tusk's speech could have financial ramifications.

Meanwhile, an Irish official has told a British Irish Chamber of Commerce event in Brussels that negotiations are moving “very quickly” and a deal could be agreed within hours.

The official said: "It is moving quite quickly at the moment. Negotiations are continuing.

"I think we are going to work over the next couple of hours with the UK government to close this off. I say hours because I think we are very close."

Theresa May is still trying to negotiate the deadlock as is believed to be working through the night in order to have something prepared ahead of the announcement.

A breakthrough in talks tonight could push Brexit into the next stage and lay the foundations for a future trade deal.

The PM’s official spokesman admitted: “There is more work to be done in terms of reaching a deal.”

One DUP MP said: “We’ve got loads of Tories coming up to us saying ‘keep going, hang in there’. “Theresa’s problems aren’t with us, they’re with her own side.”

Reuters has also quoted a senior Irish official as saying the negotiations between Westminster, Dublin and Stormont are “moving quickly” and could be concluded in a matter of “hours”. 

A spokesman for Mrs May said: "The Prime Minister has this evening spoken with Taoiseach Leo Varadkar and European Commission President Jean-Claude Juncker in separate telephone calls.

"Discussions about taking forward the Brexit process are ongoing.”

Speaking at a British Irish Chamber of Commerce event in Brussels earlier this evening, the Irish official said: "It is moving quite quickly at the moment. Negotiations are continuing.

"I think we are going to work over the next couple of hours with the UK government to close this off.

"I say hours because I think we are very close."

Mrs May could also meet with Mr Juncker as the Commission’s President reveals his major announcement.

Mr Juncker also spoke with Irish PM Leo Varadkar and Theresa May tonight, according to his chief spokesman Margaritis Schinas.

The spokesman tweeted: ”We are making progress but not yet fully there.

“Talks are continuing throughout the night.

“Early morning meeting possible.”

Brussels has given the PM a deadline of midnight Sunday to find a solution to key Brexit divorce issues.

If a draft agreement can be reached, EU bosses could give the green light for the UK to begin discussing trade with the bloc in the New Year.

But before this can happen, negotiators will need to find a workable solution for the Northern Irish border.