Brussels is also prepared to pledge to cut customs controls by 50 percent legally binding to convince the UK that it is serious about its offer, RTE-TV said.
Protocol negotiations are now likely to run into December, senior government insiders said, despite British threats to trigger Article 16 of the protocol before the end of November if there was not enough progress.
Lord Frost has written down threats to use Article 16 to suspend parts of the protocol, amid warnings that the EU could suspend or cancel the Brexit trade agreement in retaliation.
At a meeting in London on Tuesday, Kyriakos Mitsotakis, the Prime Minister of Greece, warned Boris Johnson that the EU would strike back hard if he pressed the nuclear button.
“If Britain triggers Article 16, the consequence could go as far as suspending the trade and cooperation agreement,” Mr Mitsotakis said. “I have heard that no one in Europe disagrees with this.”
Article 16 “Remain on the table”
Lord Frost told the House of Lords on Thursday that Article 16 remained “very much on the table”.
No decision had been made on the timing of the clause, he said, adding that “it will be shaped by whether and how quickly the negotiations progress”.
One source said that letting the negotiations run would provide more respite for the two sides to find solutions to the major outstanding issues, including the European Court of Justice.
EU sources have pointed out that, unlike previous Brexit negotiations, the current negotiations are not under any legal deadlines and they are prepared to continue talking.
Another source said that a political agreement could be reached at Christmas with technical work that will hammer it out in the new year.
“If it happens that we are almost there, it could continue a little bit into next year,” said a source in Brussels.
Officials from both sides are eager to reach an agreement before France takes over the EU rotating presidency in January.
Paris has its own disputes with Britain over fishing rights, which some fear could complicate negotiations in Northern Ireland.