Leaving the European Union without a deal is now Boris Johnson's "central scenario", Brussels diplomats have been told.
Both The Guardian and The Telegraph report that EU officials now believe the UK Prime Minister intends to head for a no-deal Brexit on 31 October.
It comes after Downing Street insisted Johnson still wants to negotiate a Brexit deal "with the greatest energy" - but warned that Britain would be leaving the bloc on the 31 October deadline "whatever the circumstances".
No.10 says Brexit will happen 'no ifs no buts' on 31 October even if MPs try to block it.
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Johnson has repeatedly urged the European Union to remove what he has called the "undemocratic" Irish backstop from the Brexit Withdrawal Agreement negotiated by Theresa May.
The plan was included in the current deal in a bid to avoid a hard border between Ireland and Northern Ireland in the event talks between the EU and UK break down.
But the prime minister's newly-appointed chief Europe adviser David Frost is said to have told EU officials that an alternative to the backstop "would not be ready now for Brexit".
That prompted one Brussels source to tell The Guardian: "That message has now gone loud and clear to capitals, it was useful to hear it from horse’s mouth. Reality is sinking in."
An EU source meanwhile told The Telegraph the "working hypothesis" in Brussels was "now no-deal".
And a senior diplomat said of the meetings with Frost: "It was clear UK does not have another plan. No intention to negotiate, which would require a plan. A no-deal now appears to be the UK government’s central scenario."
The warnings came as the prime minister’s most senior adviser, Dominic Cummings, accused two former cabinet ministers of undermining Whitehall's preparations for a no-deal outcome.
According to The Times, Cummings told government special advisers at a daily meeting: "It’s clear as we look at the process for no-deal planning that in all sorts of ways the previous government did not take this seriously.
"Lots of ministers, clearly like [former business secretary] Greg Clark and [Philip] Hammond, hadn’t. Precisely because they did not want to – they did not want the country to be ready for no-deal for political purposes. Therefore [they] neglected all sorts of things."
That prompted an angry pushback from one ally of Hammond, the former chancellor, who dismissed the assertion by Mr Cummings as "simply untrue".
"The bigger question is why Dominic Cummings, the de facto deputy prime minister, is so keen to spend yet more money on something that his boss insists has only a ‘one in a million chance’ of happening."
Ministers last week announced an extra £2bn of public spending to ensure "vital" areas of the economy were prepared to handle the UK leaving the EU without a deal in October.
Cummings sparked a row over the weekend amid reports he believes a no-deal Brexit can be forced through even in the event that the Government loses a vote of no confidence in the House of Commons.
Former cabinet minister Dominic Grieve branded the newly-appointed Downing Street policy adviser "the master of disinformation" over the claim and insisted MPs could still move to shut down a bid to leave the EU without an agreement.
But, in a challenge to MPs, the prime minister's spokesperson said: "The UK will be leaving the EU on October 31 whatever the circumstances, there are no ifs or buts."
They added: "Politicians cannot choose which votes to respect. They promised to respect the referendum result and we must do so."