The row has sparked bitter recriminations after music bodies were repeatedly reassured that a Brexit deal would protect touring performers, as well as their support teams and equipment.
Stars including folk singer Laura Marling and Charlatans frontman Tim Burgess have signed a parliamentary petition demanding visa-free tours, backed by almost 230,000 people.
The government is arguing it “pushed for a more ambitious agreement which would have covered musicians and others, but our proposals were rejected by the EU”.
In fact, countries as contrasting as the United States and Saudi Arabia enjoy a permit-free exemption for performers in their deals with the EU, which offers the arrangement as “standard”.
“The UK refused to agree because they said they were ending freedom of movement. It is untrue to say they asked for something more ambitious,” the source said, adding “there has to be reciprocity”.
It appears the stumbling block was Priti Patel’s immigration crackdown which has introduced tough restrictions on tours by EU musicians.
From this month, they must, like non-EU artists, apply for visas – to visit for more than 30 days – as well as providing proof of savings and a sponsorship certificate from an event organiser.
The Independent understands the UK did ask for a similar 30-day exemption for its performers, but rejected 90 days – to fit with its own new rules.
Deborah Annetts, the ISM’s chief executive, said: “I’m horrified by this new development. The government must come clean about what steps it took to protect the performing arts in the negotiations.
“The music sector feels deeply let down by the government and we want to get to the bottom of what happened.
“All the way through 2020, we were given assurances that the government understood how important frictionless travel is for the performing arts.”
Alison McGovern, Labour’s shadow culture minister, said: “If Boris Johnson’s Tories have stopped musicians from touring in Europe to make a political point, then music fans will not forgive them.
“Music is a huge export for the UK and touring and performing is now one of the main ways artists make money – so why would the Tories deliberately make it harder for musicians to make the most of opportunities in Europe?”
And Jamie Njoku-Goodwin, chief executive of UK Music, said: “Who is at fault is irrelevant and a blame game helps no one.
“The important thing is that both sides appear to genuinely want this issue sorted, so it is imperative that they get around a table and urgently agree a solution.”
But, in a House of Lords debate on Friday, the Cabinet Office minister Lord True said: “The UK proposed measures that would have allowed musicians to travel and perform in the UK and the EU more easily, without needing work permits.
“Specifically, we proposed including the work done by musicians, artists and entertainers, and their accompanying staff, in the list of permitted activities for short-term visitors.
“In practice, this would have delivered an outcome closer to the UK’s approach to incoming musicians, artists and entertainers, but these proposals were, sadly, rejected by the EU.”
It is now a matter for each EU member state to decide whether to demand work visas, in the absence of a bloc-wide agreement.