Latest: Westminster prepares Northern Ireland budget amid powersharing impasse

Update 1.25pm: Preparations are being made for the UK Government to impose a budget on Northern Ireland by the end of the month, James Brokenshire has said.

The Secretary of State said the move stopped short of direct rule and that he would abandon the idea if the Democratic Unionist Party and Sinn Fein could reach a deal in that time.

Mr Brokenshire said Northern Ireland would begin to run out of money by the end of November.

"No government could simply stand by and allow that to happen," he said.

"I am, therefore, now taking forward the necessary steps that would enable a Budget Bill to be introduced at Westminster at the appropriate moment in order to protect the delivery of public services in Northern Ireland."

The DUP and Sinn Fein failed to meet Mr Brokenshire's original Monday deadline for a powersharing deal, with Stormont effectively in limbo since January.

Mr Brokenshire said he was taking legal advice on whether MLAs should keep being paid.

Last month he said he was considering new laws on the issue of salaries - £49,500 a year, or about £41,250 in the months since Stormont has been shut.

The Secretary of State said important progress has been made in the talks, which are continuing, but the issue of Irish language rights is one of the biggest crisis points.

He said it was unlikely the Stormont Executive could be revived in time for Northern Ireland's politicians to determine the budget by the end of the month.

Mr Brokenshire said the latest deadline should not be seen as a reason to abandon the negotiations.

"Let me be clear, this is not a barrier to continued political negotiations and the Government will continue to work with the parties with that intent," he said.

"And indeed, however unlikely, should an Executive be formed speedily enough and a means could be created to provide an exceptional procedure to enable the budget to be passed by the end of November I would be prepared to withdraw the Budget Bill in order for Assembly to legislate for itself."

Mr Brokenshire urged the parties to secure a deal.

"It remains firmly in the interests of Northern Ireland to see devolved government restored, to see locally elected politicians making decisions for the people of Northern Ireland," he said.

"With goodwill and compromise on all sides the parties can still achieve this and it is what needs to happen."

Mr Brokenshire stayed in Belfast to outline the state of play and is expected to speak in Westminster on the issue on Thursday.

Ireland's Foreign Minister Simon Coveney, who had been involved in the talks earlier this week, said London was acting reluctantly and delaying a threatened budget as late as possible.

"Both governments share the view that it is regrettable and deeply concerning that, eight months after the last Assembly election, a powersharing Executive is not in place to make the necessary decisions, including on budgetary issues, for Northern Ireland," he said.

In their statements Mr Coveney and Mr Brokenshire also noted the importance of the Good Friday Agreement.

"The Irish government, working with the British government, has spared no effort in supporting and facilitating these talks over many months but the issue at the heart of this is the relationship between the parties," Mr Coveney said.

He said the DUP and Sinn Fein needed to resolve the deadlock first.

"The issues under discussion - particularly those on language and culture - go to the heart of the divisions in society here in Northern Ireland and so agreement on them was always going to be very challenging," he said.

"However, I have always believed that it is possible to reach an honourable compromise which reflects the core principles of the Agreement - partnership, equality and mutual respect."

Mr Brokenshire accepted talks could not run indefinitely.

"I think there is already a huge amount of frustration out there in Northern Ireland, that people here want to see politics here get on with the job and serving them," he said.

"Yes, this has gone on for an extended period, but I still think it is right that we use renewed efforts to find a resolution to see devolved government get back on its feet again.

"It's because it matters so much - that local accountability, local politicians serving here in Northern Ireland. But they can't merely continue forever and a day."

SDLP leader Colum Eastwood insisted the Secretary of State's move was direct rule and warned that people in Northern Ireland were deeply worried.

"A Tory/DUP government will do nothing for the rights of people in the north. It only strengthens the DUP's intransigence," he said.

"It will do nothing for the rights of Irish language speakers, the LGBT community or victims."

Mr Eastwood said direct rule was a huge step backwards from the Good Friday Agreement and he hit out at Sinn Fein's role in the talks.

"Now their failed negotiation is leading to a Tory/DUP government in London, giving Arlene Foster a blank cheque," he said.

Green Party leader Steven Agnew said there had been a blackout on what issues the Sinn Fein and the DUP cannot agree on.

"What we now need from the Secretary of State is a concerted effort to introduce transparency, creativity and inclusivity into negotiations, to end the blackout on what the sticking points are and to listen to alternative approaches," he said.

Mr Agnew also said MLAs' pay should be cut by two-thirds.

Earier: DUP and Sinn Féin powersharing talks expected to resume at Stormont

Talks between the DUP and Sinn Féin are expected to resume at Stormont this morning after another powersharing deadline came and went.

The North's Secretary of State had given the parties until last night to find a deal.

James Brokenshire says he was considering what he called "certain requests" the parties had made to the UK Government.

It looks increasingly likely that Westminster will be forced to legislate for a Northern Ireland budget.

SDLP Deputy Leader Nicola Mallon says the parties must stop playing "political chicken."

She said: "We have had the blame game now for some time, we have the DUP blaming Sinn Féin and Sinn Féin blaming the DUP.

"I think what needs to happen now is that both parties need to put their positions into the public domain but more importantly, what progress has been made."

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