Britain's divorce from the European Union veered into fresh crisis on Monday after UK government threatened to undermine the exit agreement unless free trade terms are agreed by next month.

British Prime Minister Boris Johnson on Sunday set an October 15 deadline for a post-Brexit trade agreement with the European Union, brushing off fears about "no-deal" chaos if talks fail.

That could potentially jeopardize the whole treaty and create frictions in British-ruled Northern Ireland where special arrangements had been made to avoid a hard border with Ireland to the south that could be detrimental to a peace agreement. 

The eighth round of negotiations resume in London this week, with both sides talking increasingly tough, amid accusations of intransigence and political brinkmanship.

The European Union's chief Brexit negotiator Michel Barnier said on Monday that negotiations on future relations were difficult and declined to comment on a report Britain was planning legislation to override parts of the divorce deal.

"I trust the British government to implement the Withdrawal Agreement, an obligation under international law & prerequisite for any future partnership," said Ursula von der Leyen, head of the European Commission.

"We demand quite simply, and calmly, and until the end, that the political commitments in the text agreed by (British Prime Minister) Boris Johnson be legally translated into this treaty," Barnier told France Inter radio.

Brussels has already indicated that mid-October was the latest a deal could be struck, given the need for translation and ratification by the European Parliament.

Despite months of refusing to confirm a firm cut-off date, Johnson agreed.

"There needs to be an agreement with our European friends by the time of the European Council on October 15 if it's going to be in force by the end of the year," he said in remarks released by his office.

The agreement's Northern Ireland protocol was also important to ensuring there was no physical customs border between Ireland and the province of Northern Ireland, Michel Barnier said.

It was also, he added, "the condition of a unified and functioning economy on the island (of Ireland) as well as for respecting the integrity of the EU's single market.”

"I remain worried," Barnier said of the negotiations, adding that Johnson's government wanted "the best of two worlds." 

"So, there is no sense in thinking beyond that point. If we can't agree by then, then I do not see that there will be a free trade agreement between us." Should that happen, Britain will have an "Australia-style" deal with the EU or one similar to that agreed with Canada and other countries, Johnson said.

Australia trades with the EU under World Trade Organization rules and tariffs. But Johnson, whose government had said it wanted a "zero tariff, zero quota" mechanism, insisted it would still be a "good outcome" for Britain.