A UN diplomat once famously remarked that of the world’s international disputes, the Cyprus Problem was the closest to actually being insoluble. Fifteen months after Greek Cypriots voted against the UN’s painstakingly drawn up Annan Plan, this comment has come back to haunt EU leaders who – with Cyprus now a member of the enlarged EU – must now join the British, Greek and Turkish in determining what happens next on the divided island. Prospects do not look encouraging.

Greek and Turkish Cypriot leaders are not even talking to one another. Mehmet Ali Talat, leader of the Turkish Cypriots, complains his counterpart Tassos Papadopoulos doesn’t even respond when he suggests a meeting; in turn, Papadopoulos says he will not meet until there is something to talk about and that anyway there is little point in talking to the Turkish Cypriots when Turkey calls the shots on such questions as land release or troop withdrawal. What communication there is tends to be low level – and then go nowhere. Recent secret talks in Brussels over Turkish Cypriots handing over the Greek Cypriot town of Varosha and stopping construction in the north, in exchange for direct flights and being able to use Famagusta Port to trade directly with the EU collapsed, with each accusing the other of bad faith. Indeed, in London this week to improve his government’s battered relations with the Blair government, Papadopoulos denied Varosha was ever on the table. Meanwhile, Turkish Cypriots, the UN and almost everybody else are frustrated by the failure of Papadopoulos to annunciate clearly his reservations about the Annan Plan and declare what changes he’d like.

So where does one go from here? James Ker-Lindsay, author of a forthcoming book about the Annan Plan negotiations, says the mood is bleak, with pro-plan Cypriots on both sides of the Green Line still disillusioned about the Papadopoulos government’s behaviour in refusing to support it, despite earlier assurances to contrary to both the EU and UN. Noting the Greek Cypriot stress on legalism – as owners of the entity that is the Republic of Cyprus, little opportunity is missed to stress the illegality of the Turkish Republic of North Cyprus or to jump on any proposal that might even vaguely be construed as recognition - he likens the situation to a stand-off between "30,000 Turkish soldiers and 30,000 Greek Cypriot lawyers".

"I’m afraid the truth is that Papadopoulos is Greek Cypriot nationalist politician and doesn’t care what the US, the EU or even Greece say; his concern is only for the interests of the Greek Cypriots and it is this that makes him so tricky to deal with," he says.

On the ground, the refusal of the Greek Cypriots to even acknowledge any authority north of the Green Line, or allow anyone else to – for fear this might encourage separatist sentiment or raise hopes of recognition – has had some bizarre consequences. Turkish Cypriot authorities recently had to drop charges against a known murderer living in the north because the incident took place in the south, and Greek Cypriot authorities reject handing evidence to an entity they do not recognise. Republic of Cyprus authorities recently refused to accept electrical equipment addressed to a Greek Cypriot company but wrongly delivered to the north, presumably because it was coming from a place that doesn’t exist. In this Alice in Wonderland world - where Greek Cypriots have lost the moral high ground but still have international law on their side - Turkish Cypriot hopes of ending their isolation look slim indeed. Their foreign minister Serdar Denktash has warned that having waited for a solution since 1963 - when the original Cypriot constitution collapsed following Greek Cypriot violations and Turkish Cypriots were pushed into UN-protected enclaves - Turkish Cypriots are not prepared to wait another 40 years.

"If the same mentality wins in the south’s presidential elections of February 2008 we will abandon our search for a solution with the Greek Cypriots," he said last week, however ruling out integration into Turkey.

There may be one way forward, however. Some Turkish Cypriots have suggested renouncing the unrecognised TRNC (originally set up in 1983), and then being asked to chose between a unified state with the Greek Cypriots or independence. If the latter, the Turkish Cypriots could then turn to a much more favourably disposed international community, which post Yugoslavia has become more accustomed to the notion of small states, and say: "Look, we voted yes to the Annan Plan and done everything that was asked of us, whilst you promised to lift our isolation. Nothing’s happened so we’ve had a democratic vote: if the Greek Cypriots don’t want to negotiate seriously why not recognise us and allow us EU membership as an equal partner with the Greek Cypriots?"