The pausing of funding for city and growth deals in Northern Ireland has been blasted by First Minister Michelle O’Neill as “unacceptable and deplorable”.

The move by the UK Government comes amid a spending review ahead of the Budget at the end of October.

It will impact four deals for the Belfast regions, Londonderry city and Strabane, Causeway Coast and Glens and Mid South West.

Together the four deals, worth a total of £1.7 billion, cover the whole of Northern Ireland.

The deals are bespoke funding arrangements between the Treasury, the Stormont Executive and local partners.

The UK Government had been expected to contribute around £617 million to the four Northern Ireland deals.

While it is believed that projects where contracts are already signed will proceed, there is now doubt over the future of a number of planned regeneration and digital projects.

The Derry and Strabane deal had been expected to be signed next week.

First Minister Michelle O’Neill said she will call on the Government to reconsider.

“The decision to pause funding for city and growth deals is unacceptable and deplorable, and I would urge the British Government to urgently reconsider,” she said.

“This approach is extremely short-sighted. These city and growth deals will be game-changers for the regeneration of our cities and towns, and a catalyst for economic growth and creating good jobs. It’s crucial that they continue as planned.”

Deputy First Minister Emma Little-Pengelly added: “Officials were informed of this potential direction of travel on Wednesday.

“We raised this during a meeting with the Chancellor in London on Thursday, spelling out the dire consequences such a decision would have and urged for a reconsideration.

“Departments and deal partners will be urgently assessing what this pause means for the city and growth deals projects moving forward. There will be much detail to work out, but we will do that as a matter of urgency, alongside all relevant partners.”

Finance Minister Caoimhe Archibald accused the Government of “acting in bad faith”.

She said she has written to the Treasury calling on it to “immediately reverse this reprehensible decision”, which she said “comes less than a week before the scheduled signing of the Derry City and Strabane Deal”.

She added: “I urged the British Government to provide space for proper political engagement to get to a positive outcome and a commitment to go ahead with the deal.

“Instead they have chosen to proceed to pause their funding commitments.

“The British Government have said it’s attempting to reset relationships, instead they have acted in very bad faith.

“I am calling on them to step up and honour the commitments and pledges made on city deals, where significant plans and contracts have already been put in place at significant cost to local councils, project promoters, the civil service and Whitehall departments.”

SDLP leader and Foyle MP Colum Eastwood described it as a “devastating announcement”.

He said: “Significant and substantial investment plans are now facing undue delay and disruption with no certainty or clarity ahead of the comprehensive spending review.

“The SDLP pioneered the idea of city deal funding in Northern Ireland and we had to fight the Executive every step of the way to agree.”

He added: “The British Government has said that it is committed to investing in those communities that need it most – well there’s no region that needs this kickstart investment more than Derry and the North West or Northern Ireland more generally.

“This funding was critical to projects that can transform communities across the north.

“We can’t afford to give up that opportunity. I will be in touch with British Government ministers about this decision urgently.”