* May unveils $2.1 billion fund for towns
* Britain seeking legally binding changes
* Brexiteers set out tests for a deal
By Kylie MacLellan and Michael Holden
LONDON, March 4 (Reuters) - Prime Minister Theresa May’s top lawyer will try to clinch a Brexit compromise with the European Union this week in a last ditch bid to win over rebellious British lawmakers before crunch votes that could delay the divorce for three months.
The United Kingdom is due to leave the EU on March 29 but May is hoping to win over at least 115 more British lawmakers by agreeing a legal addendum with the EU on the most controversial part of the deal - the so called Irish border backstop.
Concerns about the backstop, an insurance policy aimed at preventing a return to hard border controls between EU member Ireland and British-ruled Northern Ireland, helped prompt lawmakers to reject May’s deal on Jan. 15 by 432 to 230 votes.
Attorney General Geoffrey Cox, Britain’s top government lawyer, is due back in Brussels on Tuesday and will seek legally binding changes to the Irish border backstop.
“The attorney general continues with his work to ensure we get legally-binding changes to ensure that we are not locked in the backstop,” Communities Secretary James Brokenshire said. “The negotiations are at a critical and sensitive point.”
Brokenshire said the aim was to address lawmakers’ main concern: that Britain could be trapped in the backstop - and thus EU rules - indefinitely.
As Brexit goes down to the line, investors are watching to see if May can win over enough lawmakers to her deal: if she cannot, then the exit date is almost certain to be delayed by lawmakers eager to avoid a potentially disorderly no-deal exit.
May promised to seek “legally binding changes” to the Withdrawal Agreement, though the EU has refused to reopen the draft treaty. Parliament will vote on her tweaked deal by March 12.
If it rejects the deal, lawmakers will have a vote on whether to leave without a deal and then on whether to delay Brexit, probably by a few months until the end of June.
In a bid to win over opposition Labour Party lawmakers, May will on Monday set out plans for a 1.6 billion pound ($2.11 billion) fund to help to boost economic growth in Brexit-supporting communities.
The Labour Party’s finance spokesman, John McDonnell, said the fund was “Brexit bribery”.
“This towns fund smacks of desperation from a government reduced to bribing Members of Parliament to vote for their damaging flagship Brexit legislation,” he said.
As May seeks to win over lawmakers, a group of prominent Brexit rebels set out the changes they want to see to her agreement in return for their support: it must be legally binding, clear and set out an exit route.
But the Daily Telegraph newspaper said Cox had abandoned attempts to secure a hard time-limit or unilateral exit mechanism for the backstop.
The EU’s chief negotiator Michel Barnier said on Friday that the bloc was ready to give Britain more guarantees that the backstop was only intended to be temporary and used for a “worst-case scenario”.
Writing by Guy Faulconbridge, Editing by William Maclean