Northern Ireland has the right to leave the United Kingdom and join the European Union as part of the Republic after Brexit, ministers have conceded for the first time.

In another blow to Theresa May’s efforts to keep the union together, ministers have concluded that Northern Ireland would not have to reapply for EU membership as a new country if it voted for reunification.

It comes as civil servants prepare to take control of Northern Ireland’s budget from tomorrow after the failure of political parties in the province to restore power-sharing.

James Brokenshire, the Northern Ireland secretary, said that Sinn Fein and the Democratic Unionist Party would have a “short window” to resolve their differences and that there would be “consequences” unless a new power-sharing government was swiftly formed. “We are rapidly approaching the point where Northern Ireland will not have an agreed budget,” he said. “This is not sustainable.”

Under the terms of the Good Friday agreement of 1998 the British government is legally obliged to offer Irish voters a referendum on reuniting the country within the EU should polls show support for the plan.

Northern Ireland voted to remain in the EU last June by 56 per cent to 44 per cent.

While pre-Brexit polls have shown little support for reunification, senior government sources fear the issue could re-emerge in the event of a hard Brexit adversely affecting Northern Ireland’s interlinked economy. In the Republic, Fianna Fail and the Labour Party have both said the country must start preparing for a united Ireland.

The British government’s position was revealed in a letter from David Davis, the Brexit secretary, to Mark Durkan, the SDLP MP, passed to The Times. Mr. Davis conceded that the British government was bound by the terms of the Good Friday agreement that set in place a mechanism for reunification — should a majority of voters in both countries agree to it.

“If a majority of the people of Northern Ireland were ever to vote to become part of a united Ireland, the UK government will honor its commitment to enabling that to happen,” he wrote.

“In that event, Northern Ireland would be in a position of becoming part of an existing EU member state, rather than seeking to join the EU as a new independent state.”

He added it would be up to the European Commission to set out the “procedural requirements” for that to happen.

Mr. Davis’s statement was made after discussions with Mr. Brokenshire. A senior government source confirmed that it was the first time ministers had set out the British position.

Ministers and government lawyers are understood to have concluded that the situation in Northern Ireland is akin to that in Germany before reunification. When East Germany joined

together with West Germany in 1990 it automatically joined the European Community — the forerunner to the EU. This would mean Northern Ireland would have to adopt the euro but unlike Scotland would not have to apply for membership in its own right.

Mr. Davis’s letter makes clear that the British government position remained to “support Northern Ireland’s current constitutional status”. It added: “We are committed to the principle of consent enshrined in the Belfast agreement which makes clear that Northern Ireland’s constitutional position is a matter for the people of Northern Ireland to determine.”

Mr. Durkan said that he had been trying to force the government to clarify its position but that it had “avoided it up until now”. He said: “There must be no misunderstandings about this. While the government has acknowledged the special status of Northern Ireland, the UK now needs to join the Republic in calling for this to be made clear in any final Brexit agreement.”

Unity still a distant prospect

A united Ireland was a distant prospect before June 23 last year but the Brexit vote has put a question mark over Northern Ireland’s membership of the UK (John Walsh writes).

On June 24 Sinn Fein called for a poll on Irish unity, using the fact that a majority in the region voted to stay in the EU.

Such a response is to be expected from Sinn Fein. But for the first time in decades the main centrist parties in the Republic are also calling for a united Ireland.

There are legitimate concerns about the Northern Ireland economy after Britain’s withdrawal from the EU. Since the Good Friday agreement the border has been open, but in the event of a hard Brexit trade between Britain and the European Union would revert to WTO rules. In the case of agricultural products some of the tariffs could be 60 per cent.

The Dublin-based Economic and Social Research Institute estimates that a hard Brexit could lead to 40,000 job losses in the Republic and add €20 billion to the national debt.

However, there is little popular support for a united Ireland.

Ultimately, it is up to the electorate of Northern Ireland to determine its future. According to the last census the population of the region was 1.89 million. Just under a million come from a unionist or Protestant background. A poll by RTE and the BBC found that only 3 per cent of respondents from a Protestant background thought that a united Ireland was desirable in the short term.

There is also the somewhat naive assumption that all Catholics will vote for a united Ireland. According to the same poll, only 27 per cent of Catholics in the North thought unity was a good idea in the short term.

John Walsh is deputy Ireland editor of The Times