Irish Prime Minister Leo Varadkar said his country and the United Kingdom would have to negotiate a bilateral agreement on "full alignment" of customs to avoid a hard border, should the UK end up leaving the European Union with a no-deal Brexit.

The status of the frontier between Northern Ireland, part of the UK, and European Union member state the Republic of Ireland, remains one of the biggest obstacles to the efforts of British Prime Minister Theresa May to settle her country's exit terms from the EU, currently scheduled to happen at the end of March.

The border is the UK's only frontier with an EU member state. Both sides are keen to avoid the introduction of a hard border, which would bring reminders of the decades of violent civil conflict in Northern Ireland known as the Troubles, ended by the Good Friday Agreement of 1998, as well as causing huge practical problems for people who cross the border on a regular basis.

Earlier this week, a spokesman for European Commission President Jean-Claude Juncker said in the event of no deal, it was "pretty obvious you will have a hard border" but Varadkar said this was something that must be avoided, however possible.

"Both the UK and Ireland will have an obligation to honor the Good Friday agreement, protect the peace process and honor our commitment to the people of Ireland and Northern Ireland, that there won't be a hard border," he said.

"We'd have to negotiate an agreement on customs and regulations that meant full alignment, so there will be no hard border.

"Working out suitable customs and trade arrangements compatible with our EU membership will require detailed discussion with the commission, while the UK will also need to live up to its responsibilities. We are under no illusions about how challenging that would be."

Earlier in the week, Ireland's Deputy Prime Minister Simon Coveney was overheard telling colleagues that they should not even be heard talking about the possibility of a hard border, because of the negative reaction it would generate.

He also said that the so-called backstop, a temporary agreement included in May's Brexit proposals which were rejected by Parliament last week, was the best way to avoid a hard border.

Meanwhile, former British chancellor George Osborne has warned that the threat of a no-deal Brexit is "holding a gun to the head of the British economy".

Osborne, who is a vocal critic of May, told the BBC: "Russian roulette is a game you should never play ... if you start pretending we might leave without a deal, it might become a reality.

"I think it's interesting that my successor (as chancellor) Philip Hammond has sensibly told business leaders that that's not a possibility. We now need to hear it from the British prime minister."