The Department for Education is reportedly pushing to add extra cash for a teacher pay rise on to a £3 billion funding deal from the Treasury.

The Sun has reported that the wage settlement is under discussion as part of talks over prime minister Theresa May’s “legacy” plan.

It says a draft £3 billion one-year education funding deal was thought to have been agreed but is now being held up by discussions over more money for teacher pay.

“The Treasury is saying, ‘Take it or leave it’,” a source told the newspaper. “The feeling is this is why the Department for Education now wants to add in pay as it gets the total overall package up for No 10.”

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Ms May has been trying to secure a multibillion-pound deal for schools before she leaves Downing Street at the end of the month.

She has been reported as urging the chancellor Philip Hammond to release cash with extra money for failing schools, teacher training, higher pay for teacher retention and a review of the way the national schools budget is allocated.

The amount involved in the deal appears to have been slashed. Initial reports said that Ms May wanted a three-year deal worth £27 billion. But Mr Hammond reportedly threatened to quit over a plan that would tie the hands of the next prime minister.

On Monday, The Times reported that, after weeks of talks, Mr Hammond was now close to signing off a £5 billion boost for education. According to today’s report it has now been cut to just £3 billion. 

Mr Hammond reportedly told Ms May that he would fund her legacy plans as a trade-off for her allowing Tory MPs free votes on efforts to stop a no-deal Brexit.