British Prime Minister Theresa May has struck a deal to prop up her minority government by agreeing to $1.6 billion in extra funding for Northern Ireland in return for the support of the province's biggest Protestant party.

Key points: Ms May agreed to increase spending in Northern Ireland by $1.6b over two years

Ms May agreed to increase spending in Northern Ireland by $1.6b over two years DUP agreed to support Ms May on budget, Brexit laws, national security, overall legislative plan

DUP agreed to support Ms May on budget, Brexit laws, national security, overall legislative plan Concerns deal could put peace settlement, Good Friday Agreement, at risk

Talks have dragged on for more than two weeks after Ms May lost her majority in Parliament on June 8 with a failed gamble on a snap election.

The Democratic Unionist Party (DUP) and its 10 politicians will now support Ms May's Conservatives in key votes to keep the Government in power, although not as a coalition.

There has been some concern among politicians about the deal because of the fragile peace agreement in Northern Ireland.

Ms May and DUP leader Arlene Foster presided at the signing of a deal at Downing Street.

They smiled and joked, as negotiators from both sides — the DUP's Jeffrey Donaldson and the Conservatives' Gavin Williamson — signed the deal that will run for the life of the current parliament, due to end in 2022.

"I welcome this agreement, which will enable us to work together in the interest of the whole United Kingdom, give us the certainty we require as we embark on our departure from the European Union, and help us build a stronger and fairer society at home," Ms May said in a statement.

As part of the deal, Ms May agreed to increase spending in the province by 1 billion pounds ($1.6 billion) over two years, while the DUP agreed to support Ms May on her budget, Brexit laws, national security and her overall legislative plan.

"Today we have reached an agreement with the Conservative Party on support for Government in Parliament," Ms Foster said outside 10 Downing Street.

"This agreement will operate to deliver a stable government in the United Kingdom's national interest at this vital time."

The deal allows Ms May to pass legislation in the 650-seat Parliament and stay in power as she attempts to negotiate Britain's exit from the European Union.

But Ms May's position remains insecure, with her Brexit strategy under scrutiny and her future as prime minister the subject of public debate.

Theresa May and Arlene Foster smiled and joked as negotiators signed the deal. ( Reuters: Daniel Leal-Olivas )

Deal 'could put Good Friday Agreement at risk'

Some senior Conservatives had voiced unease at a deal with the DUP, saying it could put at risk the 1998 peace settlement in Northern Ireland, known as the Good Friday Agreement or the Belfast Agreement.

Ms Foster said a deal with Ms May could help drive a second deal on power-sharing in the province.

Northern Ireland has been in crisis since Irish republican political party Sinn Fein pulled out of government in January, prompting an election in March and a series of missed deadlines to restore the compulsory coalition between Irish Catholic nationalists and pro-British Protestant unionists.

In a statement after reaching the deal, Ms May urged Northern Irish political parties to agree over the province's government by a June 29 deadline.

"The agreement makes clear that we remain steadfast to our commitments as set out in the Belfast Agreement and its successors, and in governing in the interests of all parts of the community in Northern Ireland," Ms May said.

Sinn Fein said last week "time was running out" given the lack of knowledge about the impact of any Conservative/DUP deal.

"Time is running short for the parties to come together and reach agreement to re-establish a power-sharing," Ms May said.

"Northern Ireland needs a functioning devolved government at this important time."

Reuters