The US has suspended a technology deal with Britain amid frustrations with Labour over trade talks, it is understood.
The US-UK "Technology Prosperity Deal" was struck during Donald Trump's state visit earlier this year.
The agreement aims to see US firms invest in UK and boost co-operation on AI, quantum and other emerging technologies.
Officials in Britain have however confirmed the US put the deal on hold last week, with one saying President Trump's administration was pushing for the Government's concessions in areas of trade outside the tech partnership, the Financial Times reports.
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Sources told the newspaper that US officials were becoming increasingly frustrated with a lack of willingness from the Government to address so-called non-tariff barriers, including rules and regulations governing food and industrial goods.
Downing Street has however insisted the Government is in "active conversations" with the US on the deal.
The Prime Minister’s official spokesman said: “First of all, we remain in active conversations with US counterparts at all levels of government, and we’re confident of securing a deal that will shape the future of millions on both sides of the Atlantic.
“Our special relationship with the US remains strong and the UK is firmly committed to ensuring the tech prosperity deal delivers opportunity for hard-working people in both countries.”
Sources told the newspaper that US officials were becoming increasingly frustrated with a lack of willingness from the Government to address so-called non-tariff barriers
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He said he would not comment on the “live” negotiations but added, “negotiations of this kind are never straightforward” and “both parties obviously want what’s best for their countries”.
Sir Keir Starmer and Mr Trump signed a memorandum of understanding on the deal in September, with pledges to work together in areas including AI, nuclear energy and quantum technology.
US tech companies also announced billions in spending in the UK, including £22billion from Microsoft and £5billion from Google, under the deal.
The US is Britain's largest trading partner and its big tech companies have already invested billions of dollars in their UK operations.
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Sir Keir Starmer and Mr Trump signed a memorandum of understanding on the deal in September
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The memorandum on the tech deal noted it would become operative “alongside substantive progress being made to formalise and implement” the May agreement, known as the economic prosperity deal.
Downing Street rejected a suggestion that the signing of the agreement in September was performative given that negotiations are still going on.
“I don’t accept that at all,” the spokesman said.
“It was a firm commitment to ensuring a tech prosperity deal which delivers opportunity for hard-working people in this country.”
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