He said the UK had "repudiated" the deal negotiated previously with Theresa May's government and had "sort of put half of that now back on the table, and are saying that's a concession. And of course it isn't, really".
And following talks in Downing Street, the president of the European Parliament said there had been "no progress" and MEPs would not agree to a compromise deal "at any price".
David Sassoli said the UK's new proposed customs arrangements for Northern Ireland were a "long way from something to which the Parliament could agree".
Amid frantic diplomatic manoeuvring in European capitals, details of a call earlier on Tuesday between the UK and German leaders have reignited tensions across the continent.
The No 10 source suggested Mrs Merkel told her counterpart the only way to break the deadlock was for Northern Ireland to stay in the customs union and for it to permanently accept EU single market rules on trade in goods.