Prime Minister Gordon Brown today said a crunch summit to save Northern Ireland's power sharing government had failed to secure a settlement but insisted a "pathway" to an agreement had been laid.
Speaking alongside Irish premier Brian Cowen, Mr Brown said three days of intensive negotiations between the main parties had seen progress made on the row surrounding stalled devolution of policing powers.
But he said the party leaders had now been given 48 hours to try to hammer out a deal. If they fail to do so, Mr Brown said, the British and Irish governments would publish their own plans for moving the process forward.
Mr Brown said: "We believe we have proposals that make for a reasonable deal on devolution of policing and justice, we believe we have proposals that make for a reasonable settlement on all the outstanding issues."
But he added in regard to the 48-hour deadline: "If we judge that insubstantial progress has been made we will publish our own proposals."
Sinn Fein has threatened serious consequences for the devolved administration without a swift transfer of law and order powers.
But the DUP has insisted it will only give the go-ahead when other outstanding issues, such as the management of controversial parades, are resolved.
Moments before the premiers wound up proceedings, tensions between the two main parties apparently reached boiling point at a round table plenary session, with Sinn Fein's Martin McGuinness venting his anger that the summit had failed to secure a settlement.
Afterwards Mr Brown said he believed proposals to devolve policing powers to Stormont in May could be brought to a vote in the Assembly as early as March.
But he said the other issues had to be settled.
Mr Brown said: "The importance of these decisions for the future of Northern Ireland cannot be under-estimated. With leadership and courage they can be achieved."
DUP leader and first minister Peter Robinson said his party remained committed to the devolution of policing powers, but said it would not let that happen until the conditions were right.
He expressed confidence that the parties could reach a settlement but insisted Sinn Fein had to show some flexibility in their approach.
Mr Robinson made clear that his party would not bend under the threat of a Sinn Fein walkout.
He said: "The Democratic Unionist Party is committed to ensure that devolution works in the best interests of the people of Northern Ireland and will not accept any second rate deal simply to get across the line to suit someone else's deadline."
He added: "If others choose to walk away then I believe that the wrath of the community will be upon them for doing that."
After the leaders left, the three minor parties in the Assembly gave their reaction to the stalemate.
SDLP leader Mark Durkan said that, while there was a lot of frustration, there was still the opportunity to make progress.
"We need to just wind our necks in, calm down, sit down and face all of the issues with all of the parties."
Sir Reg Empey, leader of the Ulster Unionists, said the prize was too great to fail now.
"Having come the distance we have come, I think it would be a tragedy that we would falter at this last stage," he said.
But the senior unionist warned that his party would not be forced to sign up to a deal just because Sinn Fein was demanding immediate progress.
"I want to make it clear Sinn Fein are not going to bully us. We have our issues, we have our mandate and we intend to have our agenda discussed with the other parties."
Leader of the cross-community Alliance Party David Ford, who is tipped to take on the justice ministry if powers are devolved, said the process had reached an extremely serious juncture.
But he added: "I do not believe that it is impossible to resolve this situation at the present time if there is a willingness to engage, and instead of engaging in the blame game and the whinge game, the parties get down to engaging seriously and sensibly together."
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