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Theresa May has agreed a historic £1.5billion deal with the DUP to prop up her minority Tory government.

The cash - which could fund 26,000 nurses or two years of the hated Bedroom Tax - was unveiled after weeks of negotiation today in Downing Street.

It comes despite the Tory Prime Minister repeatedly claiming there was "no magic money tree" for vital public services during the election campaign.

And it has forced Mrs May to scrap the key Tory manifesto pledges of means-testing winter fuel payments and scrapping the pensions 'triple lock'.

The deal, a 'confidence and supply arrangement' rather than a formal coalition was signed this morning within minutes of DUP leader Arlene Foster visiting Downing Street.

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The Prime Minister has made a sustained effort to woo the 10-strong bloc of DUP MPs ahead of crunch votes this week on the legislative package set out in the Queen's Speech.

In total Northern Ireland is being given £1billion of new money and "new flexibility'' in almost £500m already committed to the region, Ms Foster said.

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The government will make £400 million available for infrastructure development in Northern Ireland.

A further £150 million will be spent on ultrafast broadband in the province.

£200 million will go towards "transforming the health service" - despite a £22billion cutbacks programme across Britain.

(Image: REUTERS) (Image: AFP)

Schools and hospitals in Northern Ireland will get £100 million to "address immediate pressures."

A further £100 million will go to "target pockets of severe deprivation", despite continuing welfare cuts and the benefit freeze in Britain.

And over five years, £50 million will be spent on mental health services, including tackling the lasting effect on people of the Troubles.

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There were fears tonight that the DUP will demand even more cash for Northern Ireland in just two years.

The DUP and Tories each pledged to “review the aims, principles and implementation” of their agreement at the end of each parliamentary session. The current session ends in spring 2019.

Nick Macpherson, a former top civil servant in the Treasury, warned in a tweet: “£1 billion for Ulster is just a down payment. DUP will be back for more...again and again... They have previous in such matters. #profligacy.”

A senior Conservative source insisted the deal signed today was “for five years”.

But the Guardian quoted DUP sources in Belfast saying the party would be looking for more deals as the parliament went on.

And Tory grandee Lord Heseltine warned: "I'm reminded of Enoch Powell's phrase: 'Once you have paid the Danegeld, you never get rid of the Dane."

The Danegeld was a tax demanded by Viking marauders to spare a village from pillage.

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Labour leader Jeremy Corbyn said: “The Government must immediately answer two questions.

"Where is the money for the Tory- DUP deal coming from? And, will all parts of the UK receive the much needed additional funding that Northern Ireland will get as part of the deal."

Welsh First Minister Carwyn Jones said it was “a straight bung to keep a weak PM and a faltering government in office”.

He added: “It is outrageous that the prime minister believes she can secure her own political future by throwing money at Northern Ireland whilst completely ignoring the rest of the UK.”

Scotland First Minister Nicola ­Sturgeon said: “In concluding this grubby, shameless deal, the Tories have shown that they will stop at nothing to hold on to power, even sacrificing the very basic principles of devolution.”

And Labour MP Emily Thornberry warned the deal could put the Northern Ireland peace agreement at risk.

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Tory sources said they “want” the extra £1billion to be spent by a restored Northern Ireland executive. But they left open the door to still spending the cash under direct rule if parties in Stormont fail to reach a power-sharing deal by this Thursday's deadline.

“If despite our collective efforts it proves impossible to re-establish the Executive, the Conservative Party, in signing this agreement, has recognised the case for the higher funding Northern Ireland needs,” a source said.

Northern Ireland may not have to hand the cash back if the DUP later breaks its promises, or power-sharing is re-established only to collapse again.

A Tory source said the deal was not “transactional”, adding: "There has always been money going to the Northern Ireland executive, of which this is part."

Asked if the deal would reduce the prospects of a powersharing agreement being secured in Northern Ireland, Mrs Foster said this morning: "Not at all. Actually, I think that this agreement will bring the prospects of doing a deal at Stormont closer because this will have a positive impact in relation to Northern Ireland.

"So, I very much hope that this week we will be able to conclude on two agreements."

Mrs May added: "Time is running short for the parties to come together and reach agreement to re-establish a power-sharing Executive by 29 June. I hope the parties will look beyond their differences and come together with a shared sense of common purpose to serve all communities in the best interests of Northern Ireland. Northern Ireland needs a functioning devolved government at this important time.

“Her Majesty’s Government will continue to do everything we can to work with the parties in Northern Ireland, alongside the Irish Government, to bring back a strong voice at Stormont for a positive future for everyone in Northern Ireland.”

The DUP has made it clear it will only agree a deal if it delivers tangible benefits for Northern Ireland in terms of jobs and investment in health and education.

But some Conservatives have raised concerns about linking up with the unionist party because of its opposition to same-sex marriage and abortion.

Tory grandee Lord Patten claimed the DUP is a "toxic brand" and would push the Conservative Party "back into the situation where there's a danger of it looking like the 'Nasty Party"'.

Former Northern Ireland secretary Theresa Villiers, however, said she did not accept that a deal would make the Tories look nasty.

She told BBC Radio 4's Today programme: "There are issues on which we don't agree with the DUP but these are, in the main, free vote issues. They are not going to be part of a deal."