The UK government is pausing funding of City Deals in Northern Ireland.

The deals are regeneration funding packages worth more than £1.5bn with about £600m coming from central government.

The implications of the pause are not yet clear, but Northern Ireland’s First Minister Michelle O’Neill described it as “unacceptable and deplorable”.

It is understood the pause has happened in the context of the UK spending review and the government does not want to commit funds before that process is completed in October.

That means the deals could be ‘unpaused’ then, although Stormont ministers want that to happen immediately.

There are four deals in Northern Ireland: the Belfast City region, Derry City and Strabane, Mid South West region, and Causeway Coast and Glens.

O’Neill called the UK government’s approach “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,” she said.

“It’s crucial that they continue as planned.”

Little-Pengelly said Stormont 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,” she said.

“Departments and deal partners will be urgently assessing what this pause means for the City and Growth Deals projects moving forward.”

Stormont’s Finance Minister, Caoimhe Archibald, said she has written to the Treasury “calling on them to immediately reverse this reprehensible decision”.

She pointed out that it has come “less than a week before the scheduled signing of the Derry City and Strabane Deal”.

“The British government have said it’s attempting to reset relationships; instead, they have acted in very bad faith,” Archibald added.

“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.”

A portion of the money expected from the unsigned Derry City and Strabane deal had been earmarked to help fund the medical school in Derry.

A spokesperson for Derry City and Strabane District Council said: “We have received no formal communication of this and have no further details at this stage.”

The Belfast deal is not just limited to the city but is funding projects stretching from the north of County Antrim down to County Armagh.

It was also the most far advanced in terms of the progress of construction on capital projects.

Work began in the summer on building an Advanced Manufacturing Innovation Centre (AMIC) at the Global Point business park in Newtownabbey.