Boris Johnson and Ursula von der Leyen have released a joint statement admitting that lack of agreement on level playing field, governance and fisheries are still standing in the way of a Brexit deal.
The prime minister spoke over a video call for more than an hour with European Commission president von der Leyen on Monday following days of deadlock over finalising a free trade agreement between the UK and EU.
Without such an agreement, the UK will exit the EU with no deal when the Brexit transition period comes to an end on 31 December.
Boris Johnson will now head to Brussels for further trade talks in a further attempt to secure a deal.
It was hoped that a deal would have been reached following a tense weekend of talks, but the joint statement by Johnson and von der Leyen on Monday night confirmed that key sticking points still remain.
"As agreed on Saturday, we took stock today of the ongoing negotiations," the statement read.
Laura Silver reports for PoliticsHome, where a version of this story first appreared.
"We agreed that the conditions for finalizing an agreement are not there due to the remaining significant differences on three critical issues: level playing field, governance and fisheries.
"We asked our chief negotiators and their teams to prepare an overview of the remaining differences to be discussed in a physical meeting in Brussels in the coming days."
Johnson has long said that taking back complete control of fisheries is key to the UK regaining its sovereignty as an independent coastal nation.
Meanwhile the EU has steadfastly stuck to the position that retaining access to its internal market must be on its terms, and they will not budge on their preferred mechanism for solving disputes.
The statement comes just hours before parliament is set to vote on re-adding a controversial clause to the internal markets bill, which government has previously admitted would break international law by overriding terms already agreed with the EU in the withdrawal agreement.
The House of Lords voted to remove the sections last month, but the government claims they are necessary to uphold free trade within the United Kingdom. Critics, however, claim it will put the Good Friday Agreement at risk.
But on Monday, the government revealed it is willing to drop the parts of the Internal Market Bill if a Brexit deal is agreed.