Leaders in Greater Manchester have been given a deadline of midday on Tuesday to reach a deal with the government over the area’s 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 better financial support before agreeing to such a move.
Speaking to the BBC earlier, 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.”
Meanwhile, Health Secretary Matt Hancock told the Commons further discussions were planned with leaders in South Yorkshire, West Yorkshire, Nottinghamshire, north-east England and Teesside about restrictions in their areas.
It comes as the UK recorded a further 18,804 coronavirus cases and 80 deaths.
In a statement, Mr Jenrick said the government had offered “an extensive package of support for local people and businesses”, which was proportionate to the approach taken in other areas which have moved to the top tier – the Liverpool City Region and Lancashire.
“There are now more Covid-19 patients in Greater Manchester hospitals than in the whole of the South West and South East combined. But, unfortunately, despite recognising the gravity of the situation, local leaders have been so far unwilling to take the action that is required to get this situation under control,” he said.
“I have written to local leaders this evening to make clear that if we cannot reach agreement by midday tomorrow then I must advise the prime minister that, despite our best endeavours, we’ve been unable to reach agreement.”
Asked whether top tier restrictions would be imposed on Greater Manchester if the deadline was not met, Mr Jenrick said that was “a matter for the prime minister”.
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 – the highest level of England’s coronavirus restrictions – 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.
Discussions have been ongoing between ministers and local leaders for 10 days – but they have not been able to reach an agreement on the level of financial support the area should receive if it moves to the highest tier.
There are conflicting reports about the latest meeting between the two sides, which one source on the call said ended “abruptly”.
In a joint statement, Mr Burnham and the Labour leader of Manchester City Council, 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 spokesperson for the Ministry of Housing Communities and Local Government (MHCLG) said that while it was “disappointing” no agreement had been reached, Mr Burnham was “incorrect in claiming that officials made this proposal today”.
A key sticking point of the dispute 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 of people affected by tier three closures.
This evening, the two sides can’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 that has supported millions of wages any further – 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.
Read more from Laura.
Meanwhile, people in Wales 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.
Scotland continues to draw up plans for a three-tier framework of measures, similar to England’s.