Financial pressure on the North’s health service could force the UK Government to step in if political powersharing cannot be resurrected soon, James Brokenshire has warned.
All party leaders agreed on the need for devolution during talks with the Secretary of State on Monday and Sinn Fein claimed a deal could be done in days with the right attitude.
DUP chief Arlene Foster said talks could not be prolonged.
Mr Brokenshire warned he could be forced to pass a budget at Westminster as public services suffer.
He said: "I cannot ignore the growing concern in the wider community here about the impact that the current political impasse is having on the local economy and on the delivery of key public services."
It has been seven months since Stormont ministers took decisions and political negotiations were paused over the summer.
Health trusts recently unveiled £70 million of cost-saving proposals.
Mr Brokenshire said: "The window of opportunity to restore devolution and to form an executive is closing rapidly as we move further into the autumn.
"With pressures on public services already evident, most particularly in the health service, the need for intervention is becoming increasingly clear.
"The UK Government has a duty to the people of Northern Ireland to provide political stability and certainty.
"If this political impasse continues I will be forced to legislate in Westminster for a budget for Northern Ireland and consider next steps.
"I don’t want to have to take this action."
Mrs Foster has said the Northern Ireland Secretary needed to make a decision by next month on the prospect for fresh talks or direct rule from London.
Mr Brokenshire said he would continue to meet the parties bilaterally to establish emerging grounds for consensus, potentially returning quickly to a structured multi-party process.
Irish foreign affairs minister Simon Coveney will meet the parties on Tuesday.
Sinn Fein leader in Northern Ireland Michelle O’Neill said: "There is a short window in front of us where we need to find solutions and a way forward.
"We need a short, sharp and focused negotiation in the small time-frame we have ahead of us."
The DUP leader said Sinn Fein had reacted with breakneck speed to reject her suggestion last week that a ministerial executive at Stormont be restored alongside a parallel process dealing with cultural issues such as the Irish language.
Powersharing has been in deep freeze since early this year when the late Sinn Fein deputy first minister Martin McGuinness resigned in protest at the DUP’s handling of a botched green energy scheme which risks landing the taxpayer in millions of pounds of debt.
Mr Brokenshire held discussions with the Ulster Unionists and Democratic Unionists, nationalist SDLP, cross-community Alliance Party and Sinn Fein on Monday on whether to initiate another round of talks.
Outstanding issues in the dispute between the parties include legal protection for the Irish language and dealing with violence from Northern Ireland’s past.
Mrs Foster has called for a "common sense" solution appointing Stormont ministers alongside a time-limited process for the Irish language and Ulster Scots.
Mrs O’Neill said: "What she did was go away and call for something which she knew would be rejected."