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Theresa May has been hit by a final mutiny after her last-minute legacy spending splurge prompted Philip Hammond to threaten he'll resign.

The Chancellor has been left furious after plans emerged for Mrs May to spend £27bn on education over three years.

Reports today suggested he could even quit before Mrs May leaves office at the end of July.

In an extraordinary spat, a source close to the Chancellor said it was "immoral" and "irresponsible" to commit to so much long-term spending when she is a lame duck PM.

Shadow Chancellor John McDonnell said the row was "another example of how far the Tories are cut off from the real world."

Mr McDonnell added: "Instead of resigning because of May’s attempt to spend more on education, Hammond should resign because his austerity policies have resulted in the suffering of hungry children in class."

(Image: WPA Pool)

The source close to the Chancellor told the Press Association: "Everyone knows this Government is coming to an end and ministers are desperately trying to shore up their legacy by splashing the cash.

"Not only is it immoral to take away the choices of the next PM, it's irresponsible - especially as no-deal looms.

"There are times it's reached boiling point with the Chancellor prepared to just walk away.

"No-one's denying there are some spending pressures.

"But these are decisions to be taken by a successor in the round - not wasted on frivolous vanity projects or an attempt to bind the hands of the next person by making three-year pledges on their behalf."

Quizzed by the Mirror, a source close to the Chancellor confirmed Mr Hammond's "frustration" with No10.

(Image: Alex McBride)

But they insisted any immediate spending decisions have been cooled - with spending no longer appearing on today's Cabinet agenda.

The source added: "Over the last three years, multiple reports of Chancellor's impending resignation have proved to be premature."

Downing Street sources are frustrated in return, with one telling the Mirror the Treasury is blocking even the smallest attempts to secure Mrs May's legacy.

Number 10 is understood to be asking Mr Hammond to free up money from the £26.6 billion "war chest" he set aside in case of a no-deal Brexit to fund the plans.

In the Spring Statement in March Mr Hammond said he would decide in the Spending Review how to share the proceeds from any Brexit "deal dividend" - if an agreement passed the House of Commons.

A Downing Street source said: "It is a fact though that school funding in England is at its highest ever level - rising from almost £41 billion in 2017-18 to £43.5 billion by 2019-20.

"But while there's more money going into our schools than ever before, we know they face budgeting challenges.

"The Education Secretary has been clear he will back head teachers to have the resources they need to deliver a world class education."

Mrs May's tenure in Number 10 will end next month, and she has already sought to define her legacy with pledges to tackle climate change, mental health and modern slavery.

On Monday she set out plans for new teachers to receive training on how to spot the signs of mental health problems in youngsters, under a plan to overhaul society's approach to the issue.