British ministers will decide at the end of this month if they'll trigger Article 16 of the Northern Ireland protocol.
The Daily Telegraph reports work is already underway on legal changes to custom rules between Great Britain and the North.
Foreign Affairs Minister Simon Coveney has said it could lead to a trade dispute between the UK and EU.
MEP Sean Kelly says it could damage the relationship between both sides.
"I think at this stage it's getting very, very serious.
"We're on the precipice really, because if they do take this what I would regard nuclear action, then all bets are off.
"You cannot depend on diplomacy, discussions and negotiations around the table anymore because they're going to basically put an end to those."
