Greater Manchester leaders have been given a deadline of midday to reach a deal with the government over moving to tier three Covid restrictions.
If an agreement is not reached, Communities Secretary Robert Jenrick said he would advise the PM, who would decide on the next steps.
In this situation, the BBC’s Laura Kuenssberg said the “implication” was the top tier of rules would be imposed.
Local leaders want more financial support before agreeing to the move.
The government and local leaders - including mayors and MPs - have been embroiled in ten days of talks over tighter rules for Greater Manchester’s 2.8m population.
The “very high” alert level, also known as tier three, would mean closing pubs and bars which do not serve meals, and additional restrictions on households mixing.
Mr Jenrick said local leaders had been “so far unwilling to take the action that is required to get this situation under control”.
Speaking to the BBC, Greater Manchester’s Labour Mayor Andy Burnham said: “The government could have a deal if it better protects low-paid people. It is choosing not to do that.”
Sir Richard Leese, the Labour leader of Manchester City Council leader, told BBC Newsnight he hoped a deal could still be made, but added: “If government imposes tier three - and I hope that won’t happen - we will clearly need to comply with that.”
Why does the government want tougher restrictions?
A three-tier system of alerts was announced a week ago in an attempt to control rising coronavirus cases without a UK-wide lockdown.
Mr Jenrick said Greater Manchester hospitals now had more Covid-19 patients than the whole of south-west England and south-east England combined.
But he said local leaders in Greater Manchester had not agreed to the additional measures, “despite recognising the gravity of the situation” and with the government offering “an extensive package of support for local people and businesses”.
Prime Minister Boris Johnson said on Friday that he might “need to intervene” if local leaders did not accept a move to tier three.
In areas under tier three, pubs and bars not serving substantial meals must close and there is guidance against travelling in and out of the area.
Households are also banned from mixing indoors or outdoors in hospitality venues or private gardens.
What haven’t Greater Manchester leaders agreed a deal?
Local councillors, the mayor and MPs are concerned that tier three rules will devastate industries such as hospitality without more financial support for workers and businesses.
A key sticking point is that Mr Burnham wants the government to reintroduce the 80% furlough scheme used during the UK’s first lockdown, instead of the new Job Support Scheme which covers 67% of the wages (covered by employers and the government) of people affected by tier three closures.
Manchester’s mayor and city council leader say the city has been in restrictions equivalent to tier two for almost three months, which has “taken a toll on people and businesses” and meant they needed better protection for the lowest-paid.
In a joint statement, Mr Burnham and Sir Richard Leese said: “We had been encouraged by earlier discussions at an official level where the idea of a hardship fund, to top up furlough payments and support the self-employed, had been tabled by the government.
“It was both surprising and disappointing when this idea was taken off the table by the secretary of state.”
But a spokesman for the Ministry of Housing, Communities and Local Government said Mr Burnham and Sir Richard were “incorrect in claiming that officials made this proposal today”.
Where else are tougher restrictions being introduced?
Health Secretary Matt Hancock told the House of Commons further discussions were planned about South Yorkshire, West Yorkshire, Nottinghamshire, north-east England and Teesside moving to tier three, or very high alert.
In Wales, people will be told from Friday to stay at home, while pubs, restaurants and non-essential shops will shut, as part of a “short, sharp” national lockdown until 9 November.
It comes as a two-week school closure begins in Northern Ireland as part of a tightening of restrictions.
In Scotland, the tightest restrictions are in place in the central belt, and there are plans for a three-tier framework of measures, similar to England’s.
How bad is the spread of the virus in the UK now?
Monday’s figures show the UK recorded a further 18,804 coronavirus cases and 80 deaths.
Mr Hancock said the virus was “on the offensive” as winter approached, adding that he was concerned about the level of infections among over-60s in some northern areas.
But as the government tries to tackle the virus region by region, its claims about the impact on each area have been disputed.
On Monday, the prime minister’s official spokesman said government projections suggested coronavirus patients would take up the entire current intensive care capacity in Greater Manchester by 8 November, not including capacity in Nightingale hospitals.
But Prof Jane Eddleston, the region’s medical lead for the coronavirus response, said the situation was “serious” but Greater Manchester’s intensive care capacity was not at risk of being overwhelmed.
In their joint statement, Mr Burnham and Sir Richard said Greater Manchester’s intensive care unit occupancy rate was “not abnormal for this time of year” and it was “essential… public fears are not raised unnecessarily”.
BBC health correspondent Nick Triggle said the rise in cases in Greater Manchester “may have already stalled” with signs that the growth in hospital admissions was also slowing down.
On Monday evening, the two sides couldn’t even agree on what they actually discussed earlier.
Believe the local leaders and this morning there seemed to be hope in the air. Officials from central government had mooted the possibility of a hardship fund to help support low-paid workers who stand to lose out if businesses close their doors under tighter restrictions.
The message local leaders took from their meeting was that, while the Treasury is adamant they are not going to extend their national furlough scheme - nor increase the level of cash available from its replacement, the Job Support Scheme - Westminster might sign off extra money that could be spent that way, if local politicians saw fit.
There was no concrete agreement on the numbers, but sources in Greater Manchester suggest the cost of supporting those who need the extra help comes in at around £15m a month.
After that call, the consensus among North West leaders was moving in the direction of signing on the dotted line, with another call planned with Communities Secretary Robert Jenrick for the afternoon.
But rather than ushering in a new spirit of co-operation, that meeting went south.
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