I have found a project that I am interested in and it states that it is 'fully funded' . What does this mean? Will it be just fees or living expenses as well ? If just fees am I allowed to work as well as study?

Fully funded usually means fees and living expenses (assuming that you fit the criteria for funding). Working enough to fully support yourself as well as studying would be very difficult as a PhD requires that you work at least full time hours. Best wishes.

As Annn says as long as you fullyfill the funding criteria (residency status, qualifications, etc) then it would usually mean fees and living expences. Do you have a link to the ad?