* Britain, France wanted EU arms ban lifted to help rebels
* Deadlock could jeopardise all EU sanctions on Syria
European Union countries failed on Monday to agree on easing an arms embargo on Syria to help rebels fighting President Bashar al-Assad, Austria's foreign minister said.
The deadlock at a meeting of EU foreign ministers could mean that all EU sanctions on Syria, including those on the Assad government, would expire on Saturday and individual member states would have to decide whether to keep sanctions in place, Michael Spindelegger said.
However, other EU diplomats at the meeting in Brussels disputed the Austrian version of events, saying talks would resume later in the evening and there was still a chance of salvaging an agreement.
"Nothing has failed. Germany and the Netherlands will push very hard to find an acceptable compromise for everybody," a Dutch diplomat said.
Britain and France have pushed to allow European governments to deliver arms. Austria and other EU capitals oppose such moves.
"I regret that after long talks it was not possible to find a compromise with the UK and France," Spindelegger told reporters. "We have no consensus, which means the sanctions regime will not be continued."
The EU's diplomatic service produced several proposals aimed at finding middle ground between the two camps but none had won the required unanimous support by the time ministers took a break from talks for dinner on Monday evening.
A spokeswoman for EU foreign policy chief Catherine Ashton said discussions in the late evening would address the "next steps", and a German diplomat said declaring talks over was premature.
"There is still a chance for a political consensus," the diplomat said.
EU sanctions on Syria, including asset freezes and travel bans on Assad and senior Syrian officials as well as the arms embargo, expire on Saturday.
Unless EU governments agree on what to do about the arms embargo before then, the entire EU sanctions package could collapse.