Northern Irish parties to resume key budget talks next week

By Amanda Ferguson

BELFAST (Reuters) - British officials will resume talks with Northern Irish parties on Monday on how to boost the region's strained budget, with an acceptable package seen as a prerequisite for the largest pro-British party to consider returning to devolved government.

Northern Ireland has been without a government for almost two years after the Democratic Unionist Party (DUP) walked out in protest over Britain's attempts to settle post-Brexit trade rules for the region, which shares a land border with EU member Ireland.

Any hope of restoring the mandatory devolved coalition - a centrepiece of the 1998 Good Friday peace agreement that ended three decades of sectarian bloodshed - hinges on parallel talks between the DUP and London over the Brexit rules.

However all parties have sought additional funding after Britain refused to increase Northern Ireland's 14.2 billion pound ($17.8 billion) annual budget in April.

London this week offered to add around 2.5 billion pounds over the next five years in a bid to remove the budgetary hurdle, however all five major parties said more is needed.

"A number of points have been raised which require further clarification, including the need for firmer proposals from the parties for how a restored executive plans to deliver the transformation of public services," Britain's Northern Ireland Minister Chris Heaton-Harris said in a statement on Thursday.

"We will be continuing our dialogue with the parties on these issues over the coming days."

Addressing the separate Brexit talks with the DUP, Prime Minister Rishi Sunak reiterated on Thursday that his government stands ready to introduce laws to protect Northern Ireland's place in the United Kingdom and the UK's internal market.

The British government has promised such a Brexit fix for the DUP for months but has yet to detail any proposals, leaving it unclear how they would be compatible with February's revised EU-UK trade deal and the Good Friday Agreement.

Mary Lou McDonald, the leader of Northern Ireland's largest party, Irish nationalists Sinn Fein, said the British government and DUP understood that the parameters of any potential new law are set within the 1998 peace deal.

($1 = 0.7997 pound)

(Writing by Padraic Halpin; Editing by Sandra Maler)