The ball is in the EU’s court if it wants to conclude a post-Brexit trade deal with the UK before the end of the year, Michael Gove has said.
Talks between the two sides have broken down amid disagreements over fishing access and competition issues.
The Cabinet Office minister said the EU’s behaviour suggested it was not “serious” about an agreement although he hoped one was still possible.
It comes as business said a deal was vital to help the post-Covid recovery.
The CBI and other trade bodies urged the government to focus on bridging its differences with the EU, warning that uncertainty about the UK’s future trading relationship with its largest market was “chipping away at business resilience” at a time when many firms were being battered by coronavirus.
Downing Street said on Friday that official negotiations with the EU on their future economic partnership were “over” and the UK should “get ready” to trade with the EU from 1 January without a specific agreement.
Prime Minister Boris Johnson said the UK should be prepared for a much more limited relationship, based on the EU’s existing arrangements with Australia.
However, this would see tariffs applied on goods crossing the channel once the UK leaves the EU’s single market at the end of the year, pushing up the cost of imports and exports.
The EU’s chief negotiator, Michel Barnier, was due in London for talks with his counterpart, David Frost, on Monday but the UK said this would be pointless without a fundamental change in direction from the bloc.
Mr Gove told Sky News’ Sophy Ridge show he expected the two men to speak on the phone in the coming days and the EU needed to show it was willing to “move ground”.
“The ball is in his court,” he said.
“What we have seen is the EU side have not been willing to produce the detailed legal text, they have not be willing to intensify the talks in a way that they are actually serious about reaching an agreement.
“At the same time they have insisted we accept a level of control over our autonomy that an independent country can’t really accept and that they should have exactly the same access to our fishing waters.”
Mr Gove said the UK was preparing for a range of outcomes and an “Australian-style departure” would be manageable, suggesting firms would be better placed outside the EU to take advantage of other trade agreements with countries such as Japan.
He added: “I want a deal (with the EU) but it takes both sides to compromise in order for there to be one. The EU is not doing so at the moment.
“And if the choice is between accepting a deal in which our hands are tied and leaving and being clear we are honouring the mandate that the British public gave us to take back control, we have to take back control.”
The EU has said it is prepared to “intensify” the talks but it won’t agree a deal at “any price”.
Businesses have warned that a failure to reach a deal will accentuate the damage done by the Covid pandemic. Trade bodies representing 190,000 firms have written to Mr Gove urging him to reach an agreement.
“With each day that passes, business resilience is chipped away,” the CBI and other groups said. “A swift deal is the single most effective way to support recovery in communities across Europe,”
“After four years of debate, there must be a resolution. 2021 can then be a year to rebuild, rather than regret.”