EU leaders have agreed to start preparing for trade talks with the UK - as Theresa May admits there is "some way to go" in negotiations.
As expected, her 27 EU counterparts agreed at a Brussels summit that not enough progress had been made on other issues to begin formal trade talks now.
But by starting internal talks, they are paving the way for them to begin, possibly in December.
Mrs May said she was "ambitious and positive" about the negotiations.
The other 27 EU leaders have gathered in Brussels for a crunch summit to assess the progress made so far in Brexit negotiations with the UK, which is due to leave the EU in March 2019, following last year's referendum result.
They have officially concluded that "insufficient progress" has been made in negotiations over citizens' rights, the UK's financial obligation and the border in Northern Ireland to allow them to move onto the second phase of talks with the UK dealing with trade discussions, after a discussion lasting just 90 seconds.
But European Council president Donald Tusk said they had given the green light to preparations for the "second phase" of Brexit talks, dealing with trade.
Speaking after the summit, Mrs May said: "I am ambitious and positive for Britain's future and for these negotiations but I know we still have some way to go."
The prime minister made a personal appeal to her EU counterparts at a working dinner last night, telling them that "we must work together to get to an outcome that we can stand behind and defend to our people", a senior government source told the BBC's Laura Kuenssberg.