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UPDATE 1-Britain confident of Brexit deal as May scrambles to win over Northern Irish kingmakers

Northern Irish kingmakers@

* Hammond says 'very confident' of deal on Brexit

* PM May, British officials to speak to DUP

* May could return to Brussels as early as Wednesday

* UK and EU scrambling to thrash out a Brexit deal (Adds quotes from Ruth Davidson)

LONDON, Dec 5 (Reuters) - Britain said it was a confident of a deal on Brexit just hours after a tentative agreement with the European Union over the Irish border was dashed by Prime Minister Theresa May's kingmakers in Belfast.

After a tumultuous day which saw a choreographed attempt to showcase the progress of Brexit talks thwarted at the last minute, May will try to gauge on Tuesday what her supporters in Northern Ireland's Democratic Unionist Party (DUP) might accept.

May, who is now scrambling to thrash out a deal with the EU while keeping the DUP, which props up her minority government, and her own party onside, may return to Brussels as early as Wednesday to continue talks, a Downing Street official said.

"We're very confident that we will be able to move this forward," finance minister Philip Hammond said as he arrived for a meeting with EU counterparts in Brussels.

"Discussions are going on right now and will go on throughout the day," Hammond said.

A European Commission spokesman said it was ready to resume Brexit negotiations as soon as London signals it is ready. Brexit minister David Davis will respond in parliament to an urgent question on the negotiations from the opposition Labour party at 1230 GMT.

May wants the EU to open the so-called second phase of Brexit negotiations, about the trading relationship after the United Kingdom's withdrawal at 2300 GMT on March 29, 2019.

But the EU will only move to trade talks if there is enough progress on three key issues: the money Britain must pay to the EU; rights for EU citizens in Britain and British citizens in the EU; and how to avoid a hard border with Ireland.

Sterling fell by a cent against the dollar on Monday after hopes of a deal were disappointed and was a further 0.5 percent lower at $1.3414 on Tuesday.

IRELAND

All sides say they want to avoid a return to a hard border between EU member Ireland and the British province of Northern Ireland, which might upset the peace established after decades of violence.

But they have found it difficult to find a way to satisfy both the Irish government and DUP lawmakers who say Northern Ireland must quit the EU on the same terms as the rest of the UK. That includes leaving the single market and customs union, which is May's official policy but complicates the border issue.

A tentative deal on the border, promising "regulatory alignment" on both sides of the island of Ireland, was agreed on Monday when May sat down to lunch with European Commission President Jean-Claude Juncker but later rejected by the DUP.

The DUP says it cannot allow any divergence in regulation between Northern Ireland and the rest of the United Kingdom.

Scottish Conservative leader Ruth Davidson, who has been tipped as a potential future leader of May's party, said that one way to solve the riddle would be for the whole country to remain in the single market and customs union.

"If regulatory alignment in a number of specific areas is the requirement for a frictionless border then the prime minister should conclude this must be on a UK-wide basis," Davidson said.

Her comments were retweeted by DUP leader Arlene Foster.

The Daily Telegraph newspaper said the DUP was still far away from agreeing to May's Brexit plans, which were criticized by supporters and opponents of Brexit alike.

Pro-Brexit lawmaker Jacob Rees-Mogg said Brexit had been saved by the DUP while veteran anti-EU campaigner Nigel Farage said May was undermining the integrity of the United Kingdom with her proposals on Northern Ireland.

Former opposition Labour leader Ed Miliband, an opponent of Brexit, castigated May's government on Twitter.

"What an absolutely ludicrous, incompetent, absurd, make it up as you go along, couldnt run a piss up in a brewery bunch of jokers there are running the government at the most critical time in a generation for the country," Miliband said. (Editing by Catherine Evans)