A further £1 million in Government cash is to be given to the Isle of Wight, to recognise additional pressures that come with being an Island.
It has also been agreed that the Department for Levelling Up, Housing and Communities will look again at the Island's funding settlement.
Government has said it will undertake 'evidence-gathering' to assess challenges faced by councils separated by the mainland.
However it said it 'does not' necessarily bring with it a promise of even more funding.
It follows recent efforts from Isle of Wight MP Bob Seely to secure additional money for the Island.
He told the County Press he has made 'very clear that it costs more to provide Council services for Islanders, compared to the mainland.'
He said: "We need a long-term uplift.
"I should clarify that getting more money for the Council is not the 'Island Deal’ alone and never has been.
"Getting an 'island deal' means getting a better deal for the Island all the time. An Island deal is not a one-off bag of money."
Mr Seely said he has already secured a better deal for the NHS, as well as Island Line investment and new money for the heavy lift crane in East Cowes shipyard, among other schemes.
The Island received a £1 million grant in 2022/23, which councillors called 'highly unsatisfactory' and 'profoundly disappointing'.
The Government has confirmed the same amount will be given as part of the 2023/24 settlement.
Council leader Lora Peacey-Wilcox said: "Always grateful for government funding.
"This amount was already included in the provisional financial settlement in December 2022 which rejected our substantial business case for additional money.
"It is therefore not ‘new’ money.”
As part of the 'evidence gathering', Government officials will work with council officers to to 'better understand' the financial implications.
Mr Seely said: "We are getting a better deal, so I also now want, working with the council, to make sure we get a better deal for council funding too."
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