The two parties which make up the outgoing coalition have worked out a deal to make sure ministers can approve next year’s spending plans after several hours of crisis talks.

They have agreed to take more time to allow the four parties negotiating to form a new cabinet to have their say about the 2018 budget, within financial parameters set by the current coalition.

The main bone of contention was Labour’s insistence on extra money for primary school teachers. The agreement includes ‘a substantial amount’ to boost teachers’ pay, Labour leader Lodewijk Asscher told reporters after the talks. The new government will have the final say about how much this should be.

‘[VVD leader and prime minister] Mark Rutte has assured me that next year’s budget will include a substantial amount for teachers’ salaries,’ Asscher said. ‘Primary school teachers should be more highly valued and a better salary is part of that.’

Asscher had promised to pull the plug on the caretaker coalition if no agreement on teachers’ pay could be reached.

The 2018 spending plans will be sent to the Council of State for its consideration on Wednesday and will be presented to parliament on the third Tuesday in September.