The agreement announced by Brexit secretary David Davis and European Union chief negotiator Michel Barnier sets out the terms for the post-Brexit transition deal to apply from March 2019 to 31 December 2020, but the proposal revealed there is still no agreement on how to avoid a hard Irish border.
Mr Barnier was speaking after a meeting of European affairs ministers in Brussels which gave unanimous backing to the deal on transition, to some 70 per cent of a Withdrawal Agreement, and as well as proposed EU guidelines for the next round of talks.
The UK had been keen to re-assert claims to fishing rights within its territorial waters immediately after Brexit, but has capitulated to European Union demands that the status quo will be maintained, although it will be consulted on fishing quotas during the period.
Environment Secretary Michael Gove said he shared the "disappointment" of fishing communities, but urged them to keep their "eyes on the prize" of getting control over the country's fishing waters for the first time in 40 years after December 2020.
He suggested it could still be based on the solution which the prime minister has rejected.
Apart from the key outstanding issue - how to avoid a border on the island of Ireland after Brexit - Barnier said other elements that were still not agreed related to data protection, geographical indications of various goods or the automatic recognition of each others' court rulings.
However, there are still some sticking points - the question of the border between Northern Ireland and the Republic of Ireland has not been resolved.
Fishermen and many Brexiteer Tories are furious the United Kingdom will effectively remain subject to the EU's Common Fisheries Policy during the 21 month transition after Britain leaves in March 2019.
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"This could push many of our fishing businesses to the wall".
"Ireland can rely on us", Merkel said.
He said the deal specified that in 2019, "there is a commitment that the UK's share of the total catch can not be changed".
"All they had to do was say no and as they acknowledged themselves, we would become an independent coastal state".
While EU officials have not hammered out what "improved" means, the outcome falls short of British hopes for a system that would come close to replicating the financial services "passports" that will be lost after Brexit.
Alan McCulla, chief executive of the Anglo North Irish Fish Producers' Organisation, said he was disappointed, but the issue was "not all over".
"And the bottom line is that even if we don't get a deal, we won't be any worse off than we are at the minute".