Theresa May has started to work on a new deal worth hundreds of millions of pounds with the Democratic Unionist Party to stop her Government collapsing in just over 18 months’ time.

Mrs May's Government will set out plans to cut Air Passenger Duty and VAT on hotels and restaurants in Northern Ireland in the new year.

The new cash will be on top of the £1billion which Mrs May agreed to spend in Northern Ireland after the DUP’s 10 MPs agree to support her minority administration.

The Treasury has promised to publish its response to the consultation at the next Budget in Autumn next year to allow the changes to be introduced in the 2019/20 tax year.

The talks were signalled in this week's Budget Red Book, which said: “Early in 2018, the government will publish a call for evidence which will consider the impact of VAT and APD on tourism in Northern Ireland, to report at Budget 2018.”

Mrs May has to offer new financial incentives to the DUP after the current confidence and supply deal runs out in June 2019.