The Northern Secretary formally paused the Stormont talks on Wednesday afternoon while warning that a failure to reach political agreement by "early May" would result in fresh Assembly elections or a return to direct rule from Westminster.
James Brokenshire had initially set Friday as the deadline for an agreement to restore devolution but when it became apparent that the DUP and Sinn Féin were still deadlocked he decided to extend the period for negotiations.
The DUP and Sinn Féin remain divided on a range of matters such as a proposed Irish language act, dealing with the past, a Bill of rights for Northern Ireland, same-sex marriage and creating a civic forum. Each blames the other for the stalemate.
Mr Brokenshire decided to give the parties more time to reach agreement. "On March 2nd, the people of Northern Ireland voted clearly for devolved government. The parties mandated by that election still have a duty to provide the government for which they campaigned," he said on Wednesday.
“I believe that the outstanding issues between the parties are surmountable, but if no Executive is formed by early May, I will need to take further steps to ensure Northern Ireland has the political stability it needs,” he added.
“This is likely to mean, however undesirable, either a second election or a return to decision-making from Westminster.”
The Northern Secretary said all five main parties had actively engaged in this round of negotiations and that “some further progress has been made, including on the formation of an Executive and on legacy”.
“There is, however, still a lack of agreement between the parties on a small but significant number of issues. The restoration of devolved government remains achievable, but more time and a more focused engagement on the critical issues are required,” he added.
“The parties will have a final opportunity after Easter to reach agreement, building on the discussions which have taken place over the past six weeks.”
Mr Brokenshire said that in the meantime and in the absence of a Northern Executive he would introduce legislation at Westminster so that local councils can send out rates bills in Northern Ireland.
He said he would also introduce provisions that would enable an Executive to be formed in early May should agreement be reached.
‘Challenging issues’
The Minister for Foreign Affairs Charlie Flanagan, who has been directly engaged in the talks, said while some progress has been made "there are some challenging issues yet to be resolved".
“As the formal talks pause briefly for Easter I encourage everyone to maintain informal contacts and to reflect on what can be achieved if, in the weeks ahead, an Executive is established that operates effectively and sustainably,” he said.
“I am convinced that all parties are willing to play their part in reaching such a sustainable agreement which will provide for stable powersharing government in Northern Ireland underpinned by the principles of the Good Friday Agreement.”
"The Irish Government as a co-guarantor of that agreement and the peace process will continue to play its part in facilitating these ongoing talks, working with the British government and encouraging all parties to reach agreement on the formation of a new Executive that is demonstrably in the best interests of the people of Northern Ireland."
