Brexit Secretary David Davis is creating a Brexit plan that would give Northern Ireland joint UK and European Union status so it could trade freely with both, as well as a buffer zone to eliminate the need for border checkpoints with Ireland, The Sun newspaper reported on Thursday.
Davis is drawing a proposed 10-mile (16-km)-wide trade buffer zone along the border that would be in effect for local traders like dairy farmers after Britain leaves the bloc, the newspaper said.
The Brexit minister's plan is a revision of the "max fac" or "maximum facilitation" plan, the report said, citing a source.
British Prime Minister Theresa May previously pledged to take the UK out of the EU customs union by considering two options. One would be "max fac" in which the UK and EU would be entirely separate customs areas but would try to use technology to reduce friction and costs at the border.
The other option being considered is a "customs partnership", according to which the UK would cooperate with the EU more closely and collect tariffs on its behalf with no requirement of declarations of goods crossing the border.
The European Union previously criticized May for not setting out how the UK would achieve a frictionless border with the EU without erecting a land border to control goods between the British province of Northern Ireland and the Republic of Ireland.
Britain suggested earlier this month that it would be willing to extend the use of EU tariffs as a backstop if there were delays in ratification of a Brexit deal to avoid a return to a hard border between Northern Ireland and Ireland, adding the government did not want to use that option.