Downing Street said that the imposition by the Prime Minister of a 30 June deadline for devolution had given new impetus to the search for a deal between the parties.
A mood of cautious optimism emerged after a weekend of intense activity, with Tony Blair and Bertie Ahern, his Irish counterpart, engaged in talks at Chequers on the way forward.
Martin McGuinness, for Sinn Fein, added to the momentum when he insisted that the Good Friday deal could be rescued if the Ulster Unionists abandoned their opposition to sitting down with republicans in a power-sharing executive before the IRA had begun to hand over its arms.
Mr McGuinness urged the UUP to enter into partnership with his party. "Time is running short but it is not yet too late for the Ulster Unionists to take their courage from those in the community who voted for change, and implement the agreement as negotiated without further delay," he said.
Mr Blair and Mr Ahern discussed the peace process at a private dinner in Chequers on Saturday night, after the two had attended the FA Cup final together.
Downing Street gave no hint of what was discussed. However, a spokesman said that all political parties were still engaged in the process. "The deadline has helped. The Government is still strongly committed to seeing a resolution before that deadline," he said.
If a deal has not been reached to establish a power-sharing executive by the end of next month, it is feared the Northern Ireland Assembly could be suspended.
The UUP has refused to set up the new executive with Sinn Fein until the IRA startsdecommissioning. Sinn Fein is equally adamant it cannot deliver on the issue of weapons.
Talks between the main parties resume at Stormont tomorrow, but First Minister and Ulster Unionist leader, David Trimble, will not be present because he is beginning a week-long visit to North America.
Mr McGuinness said in a statement that the failure to set up the executive flew in the face of what the people of Northern Ireland and the Irish Republic voted for on 22 May last year, when they endorsed the Good Friday deal by 71 per cent and 95 per cent respectively.
The majority of Unionists "took a very courageous and confident decision in giving their political leaders permission to forge a new beginning in partnership with the leaders of Irish nationalism", he said.
"The Ulster Unionists, for 12 months, have refused to deliver on that mandate. Instead they have made themselves prisoners of the very people whom the grassroots of their community rejected in the referendum and the election to the assembly."Reuse content