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UPDATE 4-UK's May secures deal to prop up government, loses key aides

* May's failure to win majority attacked by party

* Prime minister's top two aides quit

* Reports say senior Conservatives ready to ditch May, but not yet

* Reliance on DUP risks destabilising N.Ireland peace

* Merkel wants quick Brexit talks (Adds details of DUP agreement, May's new chief of staff)

LONDON/BELFAST, June 10 (Reuters) - British Prime Minister Theresa May secured a deal to prop up her minority government on Saturday after a botched election gamble that damaged her and plunged Britain into political crisis days before the start of talks on leaving the European Union.

May appeared isolated after her two closest aides resigned, paying the price for a disastrous electoral performance that cost the prime minister her majority.

Her Conservatives struck an outline deal with Northern Ireland's Democratic Unionist Party (DUP) for support on key legislation, a humiliating outcome for them after an election intended to make them a dominant force.

May had called the vote three years early in the hope that a sweeping win would strengthen her hand in the challenging Brexit talks, which are due to start in nine days' time.

That calculation backfired spectacularly on Thursday as voters stripped the Conservatives of their parliamentary majority.

May's aides, Nick Timothy and Fiona Hill, announced on Saturday that they had quit following sustained criticism of the campaign within the party.

Timothy and Hill had worked for May when she was interior minister, before she became premier in July last year in the chaotic days that followed the Brexit vote. Their influence had increasingly angered senior ministers.

Downing Street said May's new chief of staff would be Gavin Barwell, a Conservative lawmaker who lost his seat on Thursday and has experience working as a party enforcer in parliament.

The change may help to quell some of the unrest within the party. Since the election, most of the members of May's cabinet have kept quiet on the issue of her future, adding to speculation that her days as prime minister are numbered.

MORE COMPLICATED

The DUP, whose 10 seats in the new parliament give May just enough support to pass legislation, agreed in principle to a "confidence and supply" arrangement, Downing Street said.

That means it will support a Conservative minority government on key votes in parliament without a formal coalition deal.

A source close to the DUP said the party was seeking more funding for the province and concessions for former British soldiers in exchange for supporting May.

But the wooing of the DUP risks upsetting the political balance in Northern Ireland by aligning London more closely with the pro-British side in the divided province, where a power-sharing government with Irish nationalists is currently suspended.

The Observer newspaper said the deal with the DUP fell short of a full coalition agreement because of concerns among some Conservative lawmakers about the socially conservative DUP's position on gay rights, abortion and climate change.

The turmoil engulfing May has increased the chance that Britain will fall out of the EU in 2019 without a deal. She called the snap election to win a clear mandate for her plan to take Britain out of the EU's single market and customs union in order to cut immigration.

But her party is deeply divided over what it wants from Brexit, and the election result means British businesses still have no idea what trading rules they can expect in the coming years.

EU Budget Commissioner Guenther Oettinger said it may now be possible to discuss closer ties between Britain and the EU than May had initially planned, given her election flop.

"For instance, if London were to stay in the customs union, then it would not have to renegotiate all trade agreements," he told the Frankfurter Allgemeine Sonntagszeitung newspaper.

The British pound tumbled on Friday against the U.S. dollar and the euro before stabilising, down 1.7 and 1.4 percent against the two currencies respectively.

After confirming on Friday that her top five ministers, including finance minister Philip Hammond, would keep their jobs, May must name the rest of her team, who will take on one of the most demanding jobs in recent British political history.

May has said Brexit talks will begin on June 19 as scheduled, the same day as the formal reopening of parliament.

German Chancellor Angela Merkel said she assumed Britain still wanted to leave the EU and talks should start quickly.

But Elmar Brok, a German conservative and the European Parliament's top Brexit expert, told the Ruhr Nachrichten newspaper that the talks would now be more complicated.

"May won't be able to make any compromises because she lacks a broad parliamentary majority," he said.

"SHE'S STAYING - FOR NOW"

Britain's largely pro-Conservative press questioned whether she could remain in power with the clock ticking on the two-year EU divorce process.

The best-selling Sun newspaper said senior members of the party had vowed to get rid of May, but would wait at least six months because they feared a leadership contest could propel the Labour party into power under Jeremy Corbyn, who supports renationalisation of key industries and higher taxes for business and top earners.

"She's staying, for now," one Conservative Party source told Reuters. Former Conservative cabinet minister Owen Paterson, asked about her future, said: "Let's see how it pans out."

May had repeatedly ruled out the need for a new election before changing her mind.

Labour stunned even its own supporters by taking enough seats from the Conservatives to deny them a majority, in a performance widely seen as a moral victory for Corbyn despite the party's loss.

The Times newspaper's front page declared that Britain was "effectively leaderless" and the country "all but ungovernable".

"The Conservatives have not yet broken the British system of democracy, but through their hubris and incompetence they have managed to make a mockery of it," it said in an editorial. "The task of restoring orderly government in order to make sense of Brexit is now a national emergency, and it falls to them."

If May is to succeed in delivering the wish of the 52 percent of voters who opted last year to take Britain out of the EU, she must find a way to bridge the differences within her party to pass laws preparing for and enacting the departure.

Managing that process will not be easy. The eurosceptic wing of the party has long been a thorn in the side of Conservative prime ministers. At the same time, pro-Europe Scottish Conservative leader Ruth Davidson said she wanted to be involved in "looking again" at Britain's aims for Brexit.

Davidson was one of the few Conservative success stories in the election as the Scottish wing of the party won 13 seats in Scotland. She has said she favours retaining the greatest possible level of access to Europe's single market.

(Writing by William Schomberg and Kate Holton; additional reporting by Alistair Smout, Costas Pitas, Kylie MacLellan and David Milliken in London, Andrea Shalal in Berlin; Editing by Kevin Liffey)