It appeared that the DUP's refusal to accept compromise language on the future of Irish border, under which the United Kingdom would commit to "continued regulatory alignment" to ensure a hard border would not return, was a hurdle too far.
The question of how to maintain a soft Irish border had emerged as the key sticking point to getting agreement from the European Union to move on to phase two in the Brexit negotiations.
A meeting on this with all political party leaders is set for lunchtime today. "It was reported as if it was true, and now it turns out it was propaganda from the Irish Government", he said.
The EU and United Kingdom failed to reach an agreement on sufficient progress towards a Brexit deal Monday following a key lunch between Theresa May and Commission President Jean-Claude Juncker.
But the two sides said they were within striking distance of consensus, setting up a hectic negotiating rush ahead of an European Union summit next week.
Prime Minister Theresa May and European Commission chief Jean-Claude Juncker.
The border issue remained the main sticking point.
The UK government has repeatedly insisted many of these questions can not be answered until the next stage of Brexit talks - on a transition period and a future EU-UK trading and customs relationship - is allowed to begin. "But on a couple of issues some differences do remain which require further negotiation and consultation".
Calling May as a tough negotiator in his two-minute briefing, Juncker said he is confident that sufficient progress could be reached before the European Union summit slated for December 15.
The EU and the United Kingdom are nearing agreement on some divorce terms, including the size of the bill that Britain must pay as it leaves and the rights of citizens affected by Brexit.
The Prime Minister is reliant on any support from the party as the DUP is propping up her government with its 10 MPs.
"We will not accept any form of regulatory divergence which separates Northern Ireland economically or politically from the rest of the U.K.", DUP leader Arlene Foster said.
"I hope we are in a place this evening where Irish people north and south will get reassurance from the wording that is very close to being finalised now".
"And the problem between the Republic and Northern Ireland is a outcome of the British decision not only to leave the EU but also the single market and the customs union".
The EU has demanded "sufficient progress" on key withdrawal issues - the UK's exit payment, citizens' rights and Irish border - before the second phase can start.