Afterwards Mr McGuinness spoke of appealing to the international community in an effort to break the impasse, which centres on the issues of the de-commissioning of weaponry and the convening of all-party political negotiations.
Despite much Anglo-Irish diplomacy and a series of meetings between Mr Ancram and Mr McGuinness, there is no obvious sign that the two sides are any closer after many months of discussion.
Mr McGuinness said yesterday: "This is a very serious setback. Like myself most of our supporters will be very disappointed indeed. What we must now do is to appeal to the international community to come to our aid - not to Sinn Fein's aid but to the aid of the people of this island. We need people to recognise that this British government is actively squandering this opportunity for peace."
Mr McGuinness was critical of the government's refusal to endorse a plan for progress which had been drawn up by Sinn Fein President, Gerry Adams, and the leader of the Social and Democratic Labour Party, John Hume. This plan remains unpublished.
Mr Ancram, meanwhile, released a Government document setting out suggestions for a twin-track approach in which "all-party preparatory talks" would be begun while an independent international body was set up to consider the de-commissioning issue. Both activities would be undertaken jointly by London and Dublin.
The document raises the possibility of announcing a target date for the opening of all-party political negotiations. The document also avoids mention of "Washington 3," the Government's stipulation that some arms should be de-commissioned before negotiations, although official sources are adamant that this remains the Government's position.
Mr Ancram said of the failure of yesterday's meeting: "It is a setback, but not any greater than some we have had in the past."
In London, it was made clear that Sir Patrick Mayhew, the Northern Ireland Secretary, wants to clear the ground for all-party talks to go ahead by next February. Sir Patrick remains optimistic that the twin-track approach can be up and running by December. He wants the international commission to complete its report to the Irish and British governments by February, clearing the way for all the parties, including Mr Adams, and David Trimble, the Ulster Unionist leader, to sit down together.
Ministers are refusing to be hurried into a change of policy over decommisioning, in spite of efforts to use the visit to Britain by President Bill Clinton at the end of the month as a lever to force a compromise. The warning by Mr Adams that the peace process "is on the point of failure" is taken seriously by ministers. But they are convinced that the Sinn Fein leadership is not about to break off the peace talks.Reuse content