DUP warns Theresa May to 'keep her side of the bargain' on Brexit or risk deal that keeps her in power

Labour claims 'we no longer have a functioning government' after DUP refuses to support Tories in key Budget votes

The Democratic Unionist Party has warned Theresa May to “keep her side of the bargain” on Brexit if she wants to save the deal that props her up in power.

The prime minister’s partner in government stepped up its threats after refusing to support her in key Budget votes – in a direct breach of the terms of the confidence and supply agreement.

The move triggered Labour claims that “we no longer have a functioning government” and that her “grubby deal with the DUP has come back to bite her”.

John McDonnell, the shadow chancellor, said: “If a party in government cannot command a majority in parliament, it should stand aside and allow the opposition party the opportunity to seek to form a government.”

There was no official comment early today from Downing Street on whether the agreement with the DUP – struck last year, after Ms May’s botched election campaign – had been fatally undermined.

But Sammy Wilson, the DUP’s Brexit spokesman, said its message was: “We’ve got an agreement with you, but you’ve got to keep your side of the bargain – otherwise we don’t feel obliged to keep ours.”

The DUP refused to vote alongside the Conservatives on four parts of the Finance Bill, which enacts the Budget and, without which, a government cannot function.

It abstained on three measures and voted with Labour on a fourth, to review the impact of the increases to the personal tax allowance on child poverty.

The government escaped defeat because Labour was blindsided by the revolt and failed to muster enough MPs, losing by five votes. Jeremy Corbyn was among those who were absent.

The confidence and supply agreement commits the DUP to back the government “on all motions of confidence; and on the Queen's Speech; the budget; finance bills”.

Explaining its decision, Mr Wilson said the prime minister had “seriously broken” its commitment that Northern Ireland would not be treated differently from the rest of the UK in the Brexit agreement.

“Since the government has not honoured its side of the bargain we tonight tried to spell out some of the consequences of that,” Mr Wilson said.

The East Antrim MP denied the confidence and supply agreement was dead already, arguing that none of Monday night's votes were intended “to damage the government fiscally”.

But he stressed the “political message”, adding: “The prime minister has undermined her own authority with her own party and with our party by blatantly breaking promises about what she would deliver in the Brexit deal with the European Union.”

Under the fixed term parliament act, the government will not collapse unless the DUP sides with opposition parties to defeat it in a formal vote of no confidence in the Commons, which remains highly unlikely.

It is expected to continue, but in danger of failing to secure a Commons majority if the 10 DUP MPs vote against – as they have vowed to do on the Brexit agreement, next month.

Significantly, only about £430m of the £1bn set aside for Northern Ireland has been delivered so far, with the rest not due to come until the 2019-20 financial year.

Jon Trickett, Labour's shadow cabinet office minister, said: “We no longer have a functioning government. With Brexit only a few months away something has got to give.”

And David Lammy, a Labour supporter of the anti-Brexit Best for Britain group, said: “The prime minister’s grubby deal with the DUP has come back to bite her.

“Theresa May has lost the confidence and supply of the DUP because of her dreadful Brexit deal.”