Despite European leaders initially refusing to intervene, so as to retain a united front around the European Commission, the German chancellor is alleged to have stepped in. Britain is believed to be on the verge of agreement a new trade deal with the EU to replace the Brexit transition period.
A final announcement could be made earlier today and then rushed through Parliament by the end of the year.
According to the Daily Mail Ms Merkel made an “11th-hour intervention” to rescue the trade negotiations.
The German leader is reported to have pushed for Ursula von der Leyen, the European Commission president, to take over negotiations previously.
Ms von der Leyen previously served under Ms Merkel as a German defence minister.
As a result, Michel Barnier, the EU’s chief Brexit negotiator, was side-lined.
European leaders have consistently refused to hold Brexit talks with Britain directly, insisting all negotiations must take place via the European Commission.
Brussels had feared the UK would be able to “divide and rule” if it held separate negotiations with each EU member state.
Ms von der Leyen has become increasingly involved with talks over the past few weeks, discussing the state of play with Mr Johnson on December 9.
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Whilst Britain formally left the EU in January it remains in a Brexit transition period until the end of the year.
During this time the UK remains part of the European single market but has to continue following EU rules and paying into the Brussels budget.
Talks have been taking place to establish a new trading relationship for when this expires.
Had the talks broken down the UK and EU would have traded on World Trade Organisation terms from January 1, resulting in significant tariffs on each other’s goods.
French president Emmanuel Macron has taken a particularly hard line on fishing rights.
Currently the majority of fish caught in UK territorial waters are taken by non-British vessels.
Mr Macron is forecast to face a tough challenge from far-right National Rally politician Marine Le Pen in France’s 2022 presidential election.
Referencing an analogy used by Mr Johnson the French president commented: “I don’t want to have my cake and eat it but I do want the pieces cut equally because I’m not giving my piece away.”
He also parroted Theresa May’s “no deal is better than a bad deal” slogan.
If confirmed the trade deal will have to pass the British and European parliaments and could also be vetoed by any one EU member state.
