The government is to make a financial contribution of £50m towards the redevelopment of Casement Park.

The move comes as part of the chancellor’s Spending Review, which allocates money to day-to-day public services for the next three years.

Rebuilding the west Belfast stadium is estimated to cost about £260m – of which £120m is jointly in place from the Stormont Executive, the Irish government and the GAA.

The government’s decision will be welcomed by the GAA and some political parties, but it still leaves a shortfall of about £90m.

The Spending Review directly affects what Stormont ministers have to spend on public services in Northern Ireland.

Treasury figures published alongside the Spending Review suggest it will mean Stormont’s day-to-day spending power will increase by an average of 0.5% above inflation each year between 2026 and 2029.

Infrastructure spending is set to grow by an average of 0.7% above inflation in the same period.

The Stormont budget will also benefit from an additional £600m of “needs-based” funding provided over the Spending Review period.

This builds on an earlier agreement with the Treasury and means total “needs-based” top-ups will reach £1.3bn.

Finance Minister John O’Dowd said the money was “an important step” in providing immediate financial stability.

Last week, O’Dowd said he believed the Treasury was in “solution-finding mode” when it came to reaching agreement on funding for Casement Park.

The Stormont executive is contributing £62.5m towards the project, the GAA will pay £15m, while the Irish government has pledged about £43m.

The GAA has acknowledged it will need to increase its commitment.

Casement Park, with a proposed 34,500 capacity, had been earmarked to host football games at the Euro 2028 football tournament but, with the project on hold, the plan was shelved.

Stormont’s Communities Minister Gordon Lyons has defended his handling of the planned Casement redevelopment and insisted the hold-up was not his fault.

He has said the GAA will need to make its plans for the stadium more affordable if the government fails to cover the gap for the current proposed rebuild.

“What we do need to make sure is that any additional public funding that comes forward for sport is done on a fair and equitable basis,” he said.

First Minister Michelle O’Neill welcomed the government funding and said it should act as a “springboard” to give momentum to ensure the stadium is developed.

She said it was a good news story and all the partners should now work together because “Casement Park will be built”.

Deputy First Minister Emma Little Pengelly said it was now “over to the GAA” to deal with the funding shortfall.

She added that the executive funding commitment remains and she wants to “ensure fairness across all our sports”.

Tánaiste (Irish deputy prime minister) Simon Harris said the Irish Government had long supported the redevelopment of Casement Park “as a landmark sports infrastructure project”.

Harris said it is past time for the beginning of the redevelopment and he will now engage with all partners to deliver a new stadium.

The GAA also welcomed the funding but its president Jarlath Burns said it was “not the final piece of jigsaw”.

Mr Burns said there was “much more work to do”, adding that the GAA will engage with the executive and the Department for Communities to ensure a full funding package is secured.

Enda McClafferty, BBC News NI political editor

Another piece of the complex Casement jigsaw has fallen into place but big gaps remain to be filled.

Expect the focus now to fall on both the Stormont executive and GAA to see if the funding gap can be plugged.

Campaigners for the stadium argue the £62.5m pledged by the executive needs to be increased to reflect the rise in inflation and construction costs, which some have suggested could amount to an extra £20m.

There will likely be pushback from unionist ministers unless there is increased funding for other sports like football which was also promised extra cash for regional stadia back in 2011.

It was telling when asked about the shortfall today both the first and deputy first minister held different views.

Expect lots of difficult horse trading around the executive table now the British government has placed its offer on the table.

The GAA will also come under pressure. It has indicated that it will provide more than the £15m already promised but will it consider altering the design of the stadium to reduce costs?

Don’t be surprised if we end up in another stand off with unionist ministers and the GAA refusing to put any new offers on the table first.

There is also the looming deadline as the planning permission for the stadium expires next summer.