DUP told share power or assembly is finished
Taoiseach Bertie Ahern and British PM Tony Blair made it clear that, if the assembly is abandoned, Dublin would command much greater influence over the six counties.
The Taoiseach and Mr Blair indicated that, if the DUP triggered the collapse of devolution by refusing to share power with Sinn Féin, the governments would push ahead with "Plan B" which entails moving towards joint management of the North through strengthened cross border bodies.
The announcement at Navan Fort, Armagh, was intended to ratchet-up pressure on Mr Ian Paisley to agree to deal with Republicans.
The two leaders said the assembly would be recalled next month and given a final deadline of November 24 to elect an executive.
"At that point we close the chapter or we close the book," Mr Blair said. "If the parties can't find a way forward, we can't let this go on forever and will have to call a halt to it," he added.
Mr Ahern expressed bewilderment that elected politicians were refusing to exercise power.
"How can it be more comfortable for political parties with a mandate to be out of government?" he asked.
Mr Paisley quickly dismissed any notion of sharing power with Sinn Féin, insisting the IRA was still armed and active.
"Currently there is no evidence that Sinn Féin/IRA will be any further advanced in giving up criminality in November," he said. Sinn Féin president Gerry Adams said his party had "delivered big time" and it was now the DUP's turn to compromise.
"I appeal to unionism to seize this opportunity. It is about a shared future for all the people on this island," he added.
The two governments used the Armagh meeting to declare they are committed to a "step change" in advancing North-South co-operation and are beginning detailed work on partnership arrangements that would be necessary if the current initiative fails.
The move has been dubbed "direct rule with a green glow". However, both leaders stressed power-sharing would be the best way forward for the North.
The assembly will be recalled on May 15 and given six weeks to set up power-sharing.
If that fails, it will meet for a further 12 weeks in the autumn and must elect an executive by November 24. If there is no deal by then the 108 members of the Stormont body will cease to receive their salaries and allowances and elections set for next year would be cancelled.
The assembly was suspended in 2002 amid allegations of an IRA spy ring in Stormont. One of the men accused of spying was Sinn Féin official Denis Donaldson.
He was exposed as a British agent last December and murdered in his Donegal hideout last Tuesday.
