Chancellor Gordon Brown and Northern Ireland Secretary Peter Hain briefed members of Northern Ireland political parties on the financial package in talks in London.
The package supports a plan put forward at talks in St. Andrews, Scotland last month for restoring a Northern Ireland assembly suspended since 2002.
The Democratic Unionist Party (DUP), and Sinn Fein must accept or reject the governments' plan by November 10.
If they agree to the proposals, preparations will get under way for restoring local government. If they do not, London will shut the assembly and continue running the province from Westminster, but with greater input from Dublin.
The British government said it would commit to at least 35 billion pounds of funding for Northern Ireland over the next four years, equivalent to more than 50,000 pounds per household, a Treasury statement said.
Funding would rise from 8 billion pounds a year at present to 9.2 billion pounds in the 2010-2011 financial year.
The government said it would also commit to an 18 billion pound capital investment strategy to 2017 if a new Northern Ireland executive is installed.
The main sticking points in the St. Andrews talks were the DUP's refusal to govern with Sinn Fein and Sinn Fein's reluctance to endorse local police.
Both parties said a deal was possible but they needed to consult their members and study the proposals in detail before making a final decision.
Blair and his Irish counterpart Bertie Ahern have dedicated almost a decade to achieving a lasting settlement in Northern Ireland. It is Blair's last chance to secure a legacy as peace broker before he steps down next year.
_________________________________________________
I really hope this goes through, but the bumblef*ck Ian Paisley and his DUP will do pretty much anything to stop the process as they hate Sinn Fein and will never have trust in them. They still believe the IRA has arms hidden and are ready to attack the bloody fools lol
It's a nice bit of money the UK is offering to put back into a country they stole
and send them on their way