Brexit: Philip Hammond brings Treasury's financial might to talks with DUP over Theresa May's withdrawal deal

Philip Hammond is leading government talks with the Northern Irish DUP in a bid to win their support for Theresa May’s Brexit deal.

With the Conservative party’s confidence and supply deal with the DUP coming up for review, the chancellor’s involvement indicates there could be a financial incentive to back the plan.

It comes as Ms May’s ministers also continue their efforts to convince Conservative eurosceptics to row in behind her twice-defeated deal, ahead of a new vote on Tuesday.

When the DUP agreed to prop up Ms May’s administration in the commons after the 2017 election, the party negotiated an extra £2bn in spending for Northern Ireland over 2018 and 2019.

Money in the agreement, and potentially the support of the party’s 10 MPs for Ms May, is set to end in June, creating the opportunity for its leader Arlene Foster to negotiate new terms, with the government’s main ask likely to be safe passage of her Brexit deal.

A source said the Unionist party was now engaging in “ongoing and significant discussions with government” on Friday.

Until now the talks had ostensibly focused on efforts by attorney general Geoffrey Cox to give them assurances that the UK would not be trapped in the Irish backstop.

But Mr Hammond’s arrival at the negotiating table indicates there is now a financial element to the discussions.

After the 2017 elections the two parties’ deal set out what the DUP agreed to support the Conservatives on, in exchange for financial support for Northern Ireland.

The deal contained an assurance from the Conservatives that they would “never be neutral in expressing their support for the union” and there was also a commitment that the deal would be reviewed by both parties at the end of each parliamentary session.

Support from the DUP could lead to Ms May’s deal being approved by the commons next week, after it was defeated for the second time on Tuesday by 149 votes.

MPs backed a delayed Brexit beyond 29 March in dramatic parliamentary scenes which saw a majority of the Conservative party in the opposite lobby from the prime minister.

The prospect of a lengthy delay to Brexit has also prompted some Tories to admit that they might now back Ms May’s deal.

Conor Burns, a close ally of Boris Johnson, said: “I am now looking for a reason to support it. The pretence that this parliament has honoured this referendum result is now slipping away.

“If there is a two-year extension then your [Brexit] mandate is five years old and the urgency of your instruction clearly diminishes over time.”

Another, Lucy Allan, wrote on Twitter: “Last night, Labour MPs together with a handful of hardcore Conservatives voted to take no deal off the table. So now we will not be leaving the EU on 29 March…and they cheered.

“Now the option we are faced with is Theresa May’s deal or no Brexit.”

But any delay will require the agreement of the other 27 European Union members, with talks about any conditions for an extension set to begin before leaders gather at a summit next week.

European Council president Donald Tusk met Dutch Prime Minister Mark Rutte in The Hague on Friday before talks with the bloc’s key power brokers Angela Merkel and Emmanuel Macron on Monday.

Following the talks, Mr Rutte said the current withdrawal agreement is the “only deal on the table”.