He said his party would seek to vote down May's Queen's Speech, or programme for government, when she presented it to parliament. "Theresa May has lost credibility and leverage in her party, her country and across Europe".
Earlier Saturday, May's top aides, her joint chiefs of staff both resigned.
Labour leader Jeremy Corbyn has insisted "I can still be prime minister" as he vowed to fight Theresa May's attempt to run a minority government "all the way". The DUP is a socially conservative pro-British Protestant group that opposes abortion and same-sex marriage and once appointed an environment minister who believes human-driven climate change is a myth. This translated into 318 seats for the Conservatives (a net loss of 12)-and a loss of the party's overall majority of 330-compared to 261 seats for Labour (a net gain of 29).
The result, as the general election showed, is a muddle.
Defence Secretary Michael Fallon, one of May's most loyal supporters, said he disagreed with Osborne's description of her as a "dead woman walking" and he expected Conservative lawmakers to rally behind her.
The pair formed part of May's small inner circle and were blamed by many Conservatives for the party's lackluster campaign and unpopular election platform.
"Imagine she survives until autumn of next year", he told Reuters.
Less than a year after May was propelled into Downing Street following Britain's surprise referendum decision to leave the European Union, party insiders were placing bets on how long she could last.More news: Gulf states announce humanitarian hotline for mixed Qatari families
"May fights to remain PM", headlined the Conservative-supporting Daily Telegraph headlined, while the Daily Mail said: "Tories turn on Theresa". It said Britain was "effectively leaderless" and the "country all but ungovernable".
In the short span that Theresa May was at the helm after her predecessor David Cameron had quit office taking responsibility for the adverse European Union membership vote, there were terror incidents that shook Britain and worsened the security environment.
"From hubris to humiliation", said the left-leaning Guardian, while the Times headline read: "May stares into the abyss".
"I sought, and to be fair to the prime minister, received a categoric assurance that in talking to the DUP that there would be no suggestion of any rollback on LGBTI rights in the rest of the United Kingdom", she told the BBC.
The new statement came after Downing Street earlier said the DUP had agreed to the principles of an outline agreement to support a Conservative government.
The two parties are broadly politically aligned, but it remains to be seen what price the DUP will demand for its support.