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Brexit Minister Lord Frost has proposed plans for an entirely new protocol to replace the existing Northern Ireland Protocol.
In a speech to diplomats in Portugal on Tuesday, he described his new legal text as "a better way forward".
The protocol is the special Brexit deal agreed for Northern Ireland to prevent a hard border on the island of Ireland.
Unionists argue it undermines Northern Ireland's constitutional position in the UK and creates a trade barrier.
Lord Frost said his proposed text would amend the NI protocol and support the Good Friday Agreement.
He said it was forward looking and improved on the existing protocol, which was excessively "rigid".
"We have a short, but real, opportunity to put in place a new arrangement, to defuse the political crisis that is brewing, both in Northern Ireland and between us," he said.
However, Lord Frost urged the European Union to look carefully at the UK's new legal text, and said the existing protocol could not survive, as it did not have support right across Northern Ireland.
He also warned that the UK could still trigger Article 16 - which allows either side to effectively override large parts of the agreement - if the EU and UK could not agree on changes to the existing protocol.
"It is this Government, the UK Government, that governs Northern Ireland as it does the rest of the UK," said Lord Frost.
"Northern Ireland is not EU territory. It is our responsibility to safeguard peace and prosperity and that may include using Article 16 if necessary.
"We would not go down this route gratuitously or with any particular pleasure but it is our fundamental responsibility to safeguard peace and prosperity in Northern Ireland and that is why we cannot rest until this situation is addressed".
The Brexit minister said there was a widespread feeling in the UK that the EU "did try to use Northern Ireland to encourage UK political forces to reverse the referendum results or at least keep us closely aligned with EU".
"Moreover, that the protocol represents a moment of EU overreach when the UK's negotiating hand was tied, and therefore cannot reasonably last in its current form," he added.
The UK government also wants to reverse its previous agreement on the oversight role of the European Court of Justice (ECJ), which is the EU's highest court.
Lord Frost said his new text proposed reliance on "international arbitration instead of a system of EU law ultimately policed in the court of one of the parties, the European Court of Justice".
The EU will bring forward proposals on Wednesday for reforming the protocol.
These will focus on easing practical problems, rather than changing oversight arrangements.