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Boris Johnson is poised to announce a Brexit deal that will keep trade with the EU free of tariffs and quotas in what he will claim as a significant coup for the UK.
Confirmation of a deal was expected early on Thursday after 24 hours of intensive one-to-one telephone negotiations between Mr Johnson and Ursula von der Leyen, the European Commission president.
The Telegraph understands that the remaining hurdles have almost entirely been cleared, with the sides haggling on Wednesday night over final details concerning fish and electric cars.
Arrangements had been put in place for an official televised announcement at 7.30pm on Wednesday but, as the evening wore on, it became clear that neither side was quite ready to put their signature to a deal.
Downing Street sources said talks would continue through Wednesday night, with a press conference pencilled in for early on Thursday morning if the remaining issues can be resolved.
Mr Johnson updated the Cabinet in a conference call late on Wednesday, and Eric Mamer, the chief spokesman for the European Commission, tweeted: "Brexit work will continue through the night... it will hopefully be an early start tomorrow morning."
However, the race to claim victory had already begun, with one French official claiming Britain had made "huge concessions" in the past 48 hours, "mostly on fish".
Officials on both sides of the Channel were nervous that a deal could be derailed by a last-second intervention by one of the EU member states.
Downing Street sources said the deal, if agreed, would be "the first of its kind" as Britain would be the first non-EU country to be allowed such free access to the Single Market.
It would mean that British businesses could carry on trading with the EU without any tariffs being placed on their goods and without any limit on the value of individual goods and services that can be traded.
The EU is Britain's biggest overseas market, accounting for 43 per cent of all UK exports to a value of £294 billion, though in 2002 the EU bought 54 per cent of all UK exports, meaning future trade growth was likely to come from further afield.
If a deal is agreed, MPs and peers are expected to be recalled to Parliament on December 30 to vote on it, with Labour already signalling its support.
The Prime Minister and Mrs Von der Leyen are understood to have cleared several of the remaining hurdles to a deal during their conversations on Wednesday. Agreements on the so-called "level playing field" rules, as well as the dispute mechanism that will rule on any alleged breaches of a deal, were both said to be within touching distance.
During the course of the day the sides were also understood to be coming closer over the issue of fish, with Britain offering a longer transition period toward full sovereignty than the three years it had proposed. The EU originally demanded a 14-year transition period.
Mr Johnson agreed that the EU would only repatriate 25 per cent of the value of fish caught in its waters during a five and a half-year transition period, sources in Brussels said.
The UK had originally demanded a three-year period with 80 per cent of the value, while the EU wanted a 10-year period with just 15-18 per cent. However, the EU stuck firm at 25 per cent when the UK asked for 35 per cent.
The Prime Minister was forced to drop his demands in exchange for a six-month cut in the transition period from the six years the EU was offering to five and a half.
After the fishing transition period, the UK will conduct annual negotiations on fishing opportunities with the EU, which was a key British ask.
The EU dropped its demand for a link between the fisheries agreement and the trade deal. London feared Brussels would retaliate by freezing UK companies out of the Single Market in retaliation for disputes over fish.
Sources said one of the reasons for the last-minute hitch in the negotiations was because the UK wanted to get electric cars and their parts included in "rules of origin" regulations, which could have put Japanese-owned car factories in the UK out of business. This was overcome, it is understood, though issues on whether it applies to electric cars were outstanding.
Senior Government sources said that if the deal was agreed it would "deliver on everything in the Conservative manifesto" by "taking back control of money, laws and borders".
Mr Johnson had been clear that the European Court of Justice would have no role in the UK in future, suggesting the EU would have to have agreed if Number 10 believed manifesto promises had been met.
The National Farmers Union, which appeared to have been briefed on the deal, said Britain had been granted "third country listing status", meaning the EU had approved exports of meat, dairy and other animal products.
After days of impasse and official statements that no deal was the most likely outcome, negotiations were understood to have moved swiftly on Wednesday after Mr Johnson took personal charge in a series of phone calls to Mrs von der Leyen.
Christmas Eve had been laid down by Michel Barnier, the EU's chief negotiator, as the absolute deadline for a deal to be secured. Mr Barnier told EU leaders that if an agreement was not clinched before Christmas Day it would be too late to ratify it before the UK left the Single Market at 11pm on December 31.
As the EU faced an earlier deadline than Britain, which can ratify a deal in just 24 hours, the waiting game seemed to have paid off for Mr Johnson.
Lord Frost, Britain's chief Brexit negotiator, was still in Brussels on Wednesday night trying to agree the wording of a deal with Stephanie Riso, Mrs von der Leyen's deputy head of cabinet, ahead of a final call between Mr Johnson and the commission president to "shake hands".
A meeting of EU ambassadors was scheduled for Thursday to start the ratification process there.
EU officials will work through Christmas Day to prepare the text if a deal was secured, Michael Martin, the Irish prime minister, said. It is thought that EU legal services require a minimum of four days to draw up a letter to send to the UK seeking "provisional application" of the treaty from January 1.
Here, ministers have drawn up plans for the Bill to pass through the Commons and the Lords and achieve Royal Assent in a single day.
Senior Tory Brexiteers warned that they expected sufficient time to go through the deal's wording, which was expected to run to 2,000 pages, and seek legal opinion.