European Union leaders warned British Prime Minister Theresa May on Friday that the "clock is ticking" to make Brexit concessions and it is increasingly likely talks will fail to move on to the next phase in December.

Britain's impending split threatened to overshadow an EU summit in the Swedish port city of Gothenburg that was meant to focus on improving social standards and seeing off the threat of populism in the post-Brexit future.

May expressed hopes the bloc would respond "positively" after she met several leaders on the sidelines, but they all warned that time was running out to settle the key divorce issues, and unlock negotiations next month on a trade deal and transition period.