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BRUSSELS, April 29 (Reuters) - The European Union is hoping that Britain's ruling conservatives and the opposition Labour Party will reach a deal this week on the terms of the country's exit from the EU, possibly including membership in a customs union, the EU's chief Brexit negotiator said.
Michel Barnier, speaking at Leuven university in Belgium, said it was up to Britain to break the deadlock. Prime Minister Theresa May agreed a withdrawal deal with the European Union last year but it was rejected three times by the deeply divided British parliament and the exit date was delayed.
"The ball is in the UK court," Barnier told students in a lecture. "It has been six months since the deal was agreed between the EU and the UK. The EU agreed to give the UK more time because the UK has requested so. Talks are still ongoing in London. That is where the deadlock must be broken," he said.
"We are hoping to see the results of the cross-party talks this week," he said.
Chancellor Philip Hammond said last Friday that he was hopeful of clinching a Brexit compromise with Labour to allow the ratification of Mays deal.
Mays government is trying to convince the Labour Party to back her deal but Labour wants to keep Britain in a customs union with the EU and has been discussing the idea of holding a confirmatory referendum on any deal they agree.
"As we have always said, should the UK be prepared to change their red lines and wish for a more ambitious future relationship, we are ready to consider this," Barnier said.
The United Kingdom was due to have left the EU on March 29. It is now unclear when, how and even if Brexit will happen but the current deadline for leaving is Oct. 31. (Reporting by Jan Strupczewski Editing by Frances Kerry)