NICOLA Sturgeon has upped the political pressure on Theresa May over Scotland’s “missing £2.9 billion” following the Conservatives’ controversial deal with Northern Ireland’s Democratic Unionists.

The First Minister believes that, under the principles of fair funding, if Northern Ireland is to get £1bn, then Scotland should receive just under £3bn – under the population share principle of the Barnett Formula used by the UK Government to distribute funds across the country.

Labour has gone further, saying over the two years of the deal Scotland should expect to get roughly £6bn and Wales £4bn while England should receive £59bn.

The UK Government insists the deal with the DUP that will provide Northern Ireland with £1bn for public services and infrastructure is outwith the Barnett Formula just like the city deals for Glasgow, Aberdeen and Inverness.

Speaking during a visit to Bristol, the Prime Minister said: "We've seen across Scotland, Wales and England Government investing in those parts of the country.

"If you look at Scotland we've seen city deals, we've seen the same in the south west of England with the Bristol city deal, we've seen the local growth deal.

"The Government recognises the importance of investing in all parts of the country. That's what I want to ensure; a country that works for everyone and ensuring that we are seeing growth and prosperity spread across the whole country."

But Derek Mackay, the Scottish Government’s finance secretary, has written to the Treasury, threatening to invoke the formal dispute resolution procedures with the UK Government.

He told MSPs at Holyrood that the Conservatives were "ripping off Scotland to the tune of £2.9bn” and said it "feels like daylight robbery".

Mr Mackay is now demanding urgent talks with Liz Truss, the Chief Secretary to the Treasury, and Mark Drakeford, his Welsh counterpart, to find a "satisfactory solution" that is "fair and reasonable to all".

He explained: “If this matter cannot be resolved with HM Treasury, then we will invoke formal dispute resolution proceedings to ensure that this matter is resolved.

"The UK Government's deal prioritises expenditure on Northern Ireland at the cost of all other parts of the UK and leaves Scotland almost £3 billion worse off than it would be if funding had been allocated using the well-established arrangements.

"We don't grudge Northern Ireland a penny; we just want fairness for every other part of the UK, not least in Scotland.”

In response to Mr Mackay’s letter, a Treasury spokesman said: “Like previous Northern Ireland support packages and city deals in Scotland and Wales, this funding is a targeted intervention to address a specific set of unique challenges. It is not unprecedented; the UK Government has always been able to provide funding outside of Barnett.”

Labour, meanwhile, released figures from the House of Commons Library suggesting that if the Barnett Formula were applied to the funding announced on Monday, it could see as much as £69bn spent in the rest of the UK.

John McDonnell, the shadow Chancellor, said: “The coalition of chaos that was set up yesterday risks increasing division in our society by easing austerity in one part of the UK alone. We need to see an end to austerity throughout the UK not just in Northern Ireland, and not just to prop up Theresa May and her failed government.”

Last week, Professor Gerald Holtham of Cardiff Metropolitan University, who has advised, among others, the Scottish Parliament on funding, said the Barnett Formula – whereby extra spending in England results in financial consequentials for Scotland, Wales and Northern Ireland – cannot work in reverse and operated “in one direction only”.

He explained: “If the Government decides it’s going to do a formula bypass, which it has done on many past occasions, that’s what it does. The Barnett Formula has no legal basis…it’s a convention; it’s at the discretion of the minister. If he wants to bypass it, he will bypass it.”

In a separate development, the SNP leadership suggested the position of David Mundell, was untenable, highlighting how he had previously said that “'any funding that goes to Northern Ireland, then Barnett rules will ensure the appropriate funding comes to Scotland'”.

But the Scottish secretary stressed the deal was transparent and did nothing to undermine the Barnett Formula.

“Only a year ago the SNP were arguing that we should give up the Barnett Formula and that we should have full fiscal autonomy, which would’ve cost Scotland billions,” declared Mr Mundell.

Earlier, John Bercow, the Commons Speaker, rejected an SNP request for an emergency debate on the Con-DUP deal.