DUP leader Arlene Foster said on Tuesday that “good progress” had been made in talks with the Prime Minister at 10 Downing Street.
But the failure to finalise a deal increases the chance of a delay to the government’s programme being put before parliament in the Queen’s Speech, scheduled for Monday.
At the first meeting of parliament since the general election, Jeremy Corbyn mocked Mrs May’s reliance on a deal with the DUP and her failure to win a majority in the general election, saying: “I’m sure we all look forward to welcoming the Queen’s Speech just as soon as the coalition of chaos has been negotiated.”
Mr Corbyn added: “I must let the House know – and the rest of the nation know – that if that is not possible, the Labour Party stands ready to offer strong and stable leadership in the national interest.”
The Labour leader received a standing ovation from his MPs before telling Mrs May: “Democracy is a wondrous thing, and can throw up some very unexpected results.”
MPs were gathered to choose a new a new House of Commons speaker and re-elected John Bercow unopposed for a fourth time.
Putting himself forward to preside over a second hung parliament, Mr Bercow said MPs were “destined for testing times”.
The Prime Minister made a joke at her own expense, responding to the Speaker’s re-election by saying: “At least someone got a landslide.”
Talks between the DUP and the Conservatives continued in the Palace of Westminster yesterday afternoon, and Ms Foster was reported to be staying in London overnight ahead of finalising a deal today or tomorrow.
Earlier the cabinet met to sign off the confidence and supply deal that will see the DUP give the Conservative government a knife-edge working majority of just nine votes.
Reports suggest the deal will provide the broad outlines of an agreement between the DUP and the Conservatives, with further talks on a rolling basis as legislation is brought before the House of Commons.
Mrs Foster said: “There’s been a lot of commentary around the issues that we are talking about and it won’t surprise anyone that we are talking about matters that pertain, of course, to the nation generally.
“Bringing stability to the UK government in and around issues around Brexit, obviously around counter-terrorism, and then doing what’s right for Northern Ireland in respect of economic matters.”
A Downing Street source said the talks had been “constructive” but refused to put a timescale on when they would conclude.
“It’ll be done when it’s done,” they added. “Talks are going well.”
But there was potential discomfort for the government when Ian Paisley Jr, one of the DUP’s ten MPs and the son of its firebrand founder, underlined its links with organised Unionism and the Orange Order.
At a photo call with the DUP group, Ms Foster said, “The future’s bright,” prompting Mr Paisley to reply with a well-known advertising slogan: “The future’s Orange.”
A failure to gain support from the Northern Irish party would risk the Queen’s Speech being voted down, with Labour promising to put forward an amendment setting out a programme for an alternative government.
Last night Jeremy Corbyn drove home his message with Labour MPs, telling them the party would be in “permanent campaign mode” and had to show unity.
Mr Corbyn addressed the first meeting of the Parliamentary Labour Party since the election last night, receiving his second standing ovation of the day from a group that passed a vote of no confidence in him a year ago.
Rather than defending his leadership, Mr Corbyn told his MPs: “We are now a government in waiting”.
To loud cheers, he said: “Now as parliament returns, we have a government in complete disarray still unable to reach an agreement, it seems, with the DUP and desperately delaying the Queen’s Speech and Brexit negotiations.
“Far from being strong and stable, the government Theresa May is putting together is weak, wobbly and out of control. This is a government on notice from the voters. Theresa May has no mandate and no legitimacy.”