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The UK government was under pressure on Monday to increase its financial offer of £2.5bn for Northern Ireland after all of the region’s main parties said it was too small to put its finances on a sustainable footing.

With time running out to restore the region’s paralysed Stormont executive before Christmas, UK government officials and representatives from the region’s political parties were set to meet at Hillsborough Castle on Monday afternoon to discuss what London calls its “generous” offer.

All of Stormont’s five main parties have dismissed the package as too small. Sir Jeffrey Donaldson, whose Democratic Unionist party triggered the political crisis almost two years ago in a dispute over post-Brexit trading arrangements, has told his party “much more will be required”.

Chris Heaton-Harris, the Northern Ireland secretary, said the financial package was contingent on restoring Stormont. “I look forward to discussing final details with the parties over the coming days,” he said in a statement.

Donaldson last week fuelled expectations he was preparing to return to the power-sharing executive but a meeting of DUP officers on Friday ended with no decision.

In a letter to party members, he welcomed “progress . . . in restructuring how we are funded” in talks at Hillsborough last week, adding: “I have no doubt the government will want to advance on their offer on Monday.”

But he stressed those talks were separate to months of negotiations between the DUP and London to reinforce Northern Ireland’s place within the UK and its ability to trade with Britain after Brexit put a customs border in the Irish Sea.

Prime Minister Rishi Sunak last week said he was ready to legislate to assuage the DUP’s concerns, suggesting the final pieces of months of negotiations were falling into place.

Analysts had speculated legislation could be passed and a financial deal struck before Westminster breaks for Christmas on Tuesday, paving the way for Stormont to return this week. But many believe a deal is now impossible before January.

Some see the financial package as a bribe to force the biggest unionist party back into Stormont. Donaldson blamed the hardline Traditional Unionist Voice party for erecting a sign reading “Stop DUP sellout” outside his constituency office.

“What we need to see now is the colour of the Treasury’s money,” Mary Lou McDonald, leader of the nationalist Sinn Féin party, told the Financial Times in an interview in Dublin.

“Chris Heaton-Harris was eager to assure all participants that he had heard, loudly and clearly, the message that he was given,” she said. “So we await a response from the Treasury.”

Northern Ireland is funded by a £15bn annual grant from London. The package includes cash to plug the current fiscal hole, meet public sector pay rises and update the calculation of Northern Ireland’s financial needs.

Chris Heaton-Harris said last week that parties had raised “a number of points . . . which require further clarification”.

He asked them to supply “firmer proposals . . . for how a restored executive plans to deliver the transformation of public services” and wants Northern Ireland to raise revenue from water rates and an increase in other charges.

But Naomi Long, leader of the Alliance party, Northern Ireland’s third-biggest political force, told BBC Radio Ulster the key sticking point was that Northern Ireland received less money from London than it needed.

“We’re [the parties] saying . . . you’ve got to fund in line with need because that’s what you do for the rest of the UK,” she said.

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