The Democratic Unionist Party last night threatened to walk away from a deal to prop up the minority Conservative Government on the eve of the Queen’s Speech.

Senior DUP sources in Belfast said the Conservatives had to give “greater focus to discussions” about a confidence and supply deal which Theresa May needs to govern.

Last night there was speculation that the Conservatives could even open talks with the Liberal Democrats’ 12 MPs about supporting the Tory Government if the DUP talks fail.

The news is a significant blow to the authority of Mrs May who said hours after the election that she would seek a deal with the DUP’s 10 Westminster MPs after she failed to win a majority of MPs in the House of Commons.

Number 10 then announced that a deal had been done 48 hours after the election, only to have to retract the statement the following day. Since then talks have continued without success.

The Daily Telegraph understands the DUP is prepared to walk away from a formal deal with the Government entirely and decide whether to back the Tories on a "case by case" basis.

The DUP is particularly concerned about the Government's policies on austerity and welfare and its MPs are even prepared to back Labour amendments on some issues.