The UK government is preparing to announce a new agreement on the post-Brexit trading rules for Northern Ireland early next week.

But speaking at a summit in Germany on Saturday, Mr Sunak said there were still "challenges to work through".

He added: "There isn't a deal that has been done - there is an understanding of what needs to be done."

Some government insiders expect a debate and vote in the House of Commons next week.

Tuesday is seen as the most likely day, although the plans are said to remain "fluid".

'Very good progress'

For more than a year UK and EU negotiators have been attempting to strike a deal on changes to the controversial trade arrangement.

The prime minister held talks with European Commission President Ursula von de Leyen in Munich in an effort to secure that agreement.

Afterwards Downing Street said it was a "positive discussion" and there had been "very good progress to find solutions".

"Intensive work in the coming days is still needed at official and ministerial levels," said No 10.

His trip to the summit comes a day after a visit to Northern Ireland to pitch his proposals to the Democratic Unionist Party (DUP).

It is among the most vocal critics of the protocol and is blocking the functioning of devolved government in Northern Ireland in protest against the trade rules.

Securing the party's support for any deal will be crucial for the future of the political institutions at Stormont.

After meeting the PM on Friday, DUP leader Sir Jeffrey Donaldson said "progress has been made across a range of areas".

But he said that Mr Sunak faced a "big moment" to agree to the "right deal" for Northern Ireland.

What is the EU saying about a deal?

The commission Vice-President Frans Timmerman said "things are progressing quite well" between the UK and the EU.

"There's a willingness on both sides to find a compromise, to find a way out," he said on Saturday.

Taoiseach (Irish Prime Minister) Leo Varadkar was briefed by Ms von der Leyen on the state of the negotiations on Saturday morning.

In their call he said he hoped for a "positive outcome that provides a new foundation for relations between the EU and the UK".

"Most importantly he hoped for an agreement that can pave the way for restoration of the institutions under the Good Friday Agreement," said his spokesman.

What is the Northern Ireland Protocol?

It is the trade deal that was agreed to ensure the free movement of goods across the Irish land border after Brexit.

It came into effect in 2021 and has resulted in checks on goods travelling from Great Britain to Northern Ireland.

Unionist parties argue that placing an effective trade border across the Irish Sea undermines Northern Ireland's place within the UK.

The largest of those parties is the DUP, which is refusing to take part in Northern Ireland's power-sharing government until its concerns are resolved.

But a majority of members of the Stormont assembly are in favour of the protocol in some form remaining in place.

Sinn Féin, the Alliance Party and the SDLP have said improvements to the protocol are needed to ease its implementation.