Brexit minister Lord Frost said it is “hard to see” how the Northern Ireland Protocol can survive in its current form.
The comments came after outgoing DUP leader Edwin Poots said he had received a personal assurance from the UK Government that significant changes will be made to the Northern Ireland Protocol.
Mr Poots, who was forced to announce his resignation as leader last week following an internal party revolt over his decision to proceed with nominating a Stormont First Minister, predicted there would be a “significant victory” on the protocol in July.
Lord Frost would not be drawn on private conversations between UK ministers and Mr Poots but accused the European Union of failing to show enough “pragmatism” to make the protocol work.
The UK Government and the EU are locked in a dispute over the implementation of the protocol, the part of the Brexit divorce deal aimed at avoiding a hard border with Ireland.
Mr Poots told the BBC: “I have received assurances that there will be changes to the protocol and that that will be very significant, that the UK Government are not going to tolerate how things are and how the EU have conducted themselves since the protocol.”
He added: “We are looking to these changes happening in July, most likely early July.
“We believe that there is a significant victory to be won on the protocol. I will hand over at the end of June (to the new DUP leader) and hopefully most of the work will actually be achieved by that stage and we can make those gains.”
Mr Poots indicated that the promise of a “significant win” had been made by Northern Ireland Secretary Brandon Lewis.
When asked what was the nature of the changes he had been promised, Mr Poots admitted “we haven’t got detail”, but the issues that needed to be addressed were around the constitutional status of the North.
Asked about Mr Poots’ comments, Lord Frost told the Commons Foreign Affairs Committee: “I can’t comment on private conversations and accounts of them. But we haven’t made a secret of the fact that we find it hard to see how, as currently operated, important elements of the protocol are sustainable.
“I don’t think that’s a new judgment. We have also said that we are considering all our options, and we are doing so.
“There is a real-world timetable to things that needs to be taken into account when we do that.
“That’s where we are at the moment, we are actively considering the options to deal with a situation that is hard to see as sustainable.”
The UK has threatened to unilaterally suspend parts of the deal if it continues to cause problems – something that would trigger a retaliation by Brussels.
One of the impacts of the deal is that deliveries of chilled meats – including sausages and burgers – could be effectively banned from crossing the Irish Sea from Great Britain to Northern Ireland at the end of the month.
The UK has formally requested an extension of that grace period to avoid a so-called “sausage war” and Lord Frost said both sides were “thinking very actively about that”.
Lord Frost insisted the impact on trade between Great Britain and Northern Ireland could not have been predicted – despite warnings in advance of Brexit about the kind of difficulties that could be caused.
“The basic problem is that the chilling effect on goods moving from Great Britain to Northern Ireland is pretty strong,” he said.
“Until we began implementing the protocol nobody could quite know that.”
He said both sides were supposed to use their best efforts to reduce checks on goods arriving in Northern Ireland, but accused the EU of showing a lack of “pragmatism and reasonableness”.
“If their approach is simply to say ‘you must just implement the EU customs code as if this were any other external frontier of the EU’ then we obviously have a problem,” he said.
Unionists are opposed to the protocol and have repeatedly called for it to be scrapped.
In an interview with the BBC, Mr Poots said he proceeded with the appointment of Paul Givan as First Minister last week, because he believed he could oppose the protocol more effectively with a functioning Assembly.
He said: “My focus is on the Northern Ireland Protocol because that is what makes a constitutional difference to Northern Ireland.”
In response, Sinn Féin north Belfast MP John Finucane said Mr Poots had not provided any detail of the proposed changes he had been promised.
“It is not within the Secretary of State’s gift as to what he does with the protocol – it is an agreement his Government entered into with the European Union.”