Brussels has accused the UK of "magical thinking" in a response to Brexit proposals concerning the Irish border.
The border with Ireland is a top priority for the two negotiating teams, with both the UK and the EU seeking to avoid the creation of a hard border between Ireland and Northern Ireland.
However, a senior EU official has warned the UK against using the peace process as a "bargaining chip" to land a free trade agreement with the bloc, according to the FT.
Brexit secretary David Davis outlined the government's stance on the Irish border in one of a series of seven position papers released this month.
The official said:
We are concerned by the linkages created in the UK paper on Ireland between the preservation of the peace process, including the invisible border, and the future of the EU-UK trade relationship.
The peace process must not be a bargaining chip in these negotiations.
Whitehall's position papers were released after the EU's Brexit negotiator Michel Barnier said the UK had not clarified its stance on a number of crucial points.
The third round of talks in Brussels will take place next week, and topping the agenda will be the UK's financial settlement with the EU.
Highlighting tensions between the two sides on the so-called "Brexit bill", foreign secretary Boris Johnson said yesterday that he did not necessarily accept Barnier's interpretation of the UK's financial obligations.