New Delhi: The European Union has rejected the British government’s proposal for a news agreement on the state aid, a key element and the only binding agent amid post-Brexit ties. According to reports, 27 leaders of the bloc gathered in Brussels amid the two-day summit on Thursday to discuss and negotiate the crucial deal.Also Read - Spain, France, Italy Among The World's Safest Countries - Where Does India Stand?

Notably, the UK government had made a last-minute decision to hold on to its trade ties with the EU amid disagreements related to corporate subsidies and fisheries. Also Read - Meet Aleesha Gadhia, 6-Year-Old Indian-Origin Girl Who Has Won UK PM's Award For Climate Action

The EU previously reiterated mulling legal options if the UK breaches the Brexit Withdrawal Agreement with the controversial Internal Market Bill, which will override some parts of the deal. The bloc has also asked for an independent British regulator to decide on state aid there Also Read - European Union Regulator Approves Pfizer COVID Vaccine Booster For 18 And Older: Report

The Internal Market Bill proposed by the Johnson-led government would override that part of that agreement when it came to goods and would allow the UK to modify or re-interpret “state aid” rules on subsidies for firms in Northern Ireland, in the event of the two sides not agreeing a future trade deal.

Prime Minister Boris Johnson has said that the bill would provide belt-and-braces protection against extreme interpretations of the Brexit protocol, adding that the law-breaking powers will only be used in extreme circumstances.

Meanwhile, his government has agreed to table an amendment to the bill, giving MPs a vote before its powers are used.

The UK left the EU on January 31, having negotiated and signed the withdrawal agreement, which is now an international treaty, with the bloc, the BBC reported.

The two sides are now in the closing weeks of negotiations for a post-Brexit trade deal before the transition period ends on December 31.

(With IANS inputs)