A deal on loyalist parades could hold the key to securing agreement on devolving policing powers to the North, it emerged last night.
The Democratic Unionist Party (DUP) and Sinn Fein were involved in closely guarded talks at Stormont's parliament buildings.
It is understood that a breakthrough was thought possible last night but not yet secured.
Alliance Party leader David Ford, the politician tipped to become Northern Ireland justice minister, warned the political stakes were high with failure likely to bring down the power-sharing government.
A deal on the restoration of policing and justice between the DUP and Sinn Fein would be the pay-off from the Robinson sex-and-money scandal.
The DUP's leader Peter Robinson has stepped down temporarily as First Minister over the scandal surrounding his wife Iris, who was revealed as having lobbied property developers for cash to set up a business for her teenage lover.
Last night it was confirmed that Mrs Robinson had resigned as an MP and it is understood her resignation has also been tendered at Stormont.
There are claims the DUP, which had previously said it would not be rushed by republican pressure for agreement on devolving policing and justice powers, is now focused on securing a deal with Sinn Fein to avoid a collapse of the Assembly and the threat of a snap election.
But the DUP's caretaker First Minister, Arlene Foster, said the transfer of justice powers was in the interests of the people of the North, but could not be secured until other issues were dealt with.
"There are things that need to be sorted out -- issues around parading. We will work to have those sorted out and to bring the devolution of policing and justice to Northern Ireland.
"But we must do it in a way that we bring it to a Northern Ireland that is stable."
Unionists are demanding changes to how controversial loyal order parades are overseen as part of a final deal.
While the DUP and Sinn Fein have been at loggerheads over the issue, sources suggested last night that a compromise could be struck which might unlock a wider deal. Taoiseach Brian Cowen is due to meet with British Prime Minister Gordon Brown in London today to discuss political progress.
In a further signal of possible progress, the DUP and Sinn Fein were careful to avoid any public statements that might unsettle the talks.
Sources said the inner circle involved in negotiations had kept details from party colleagues, confirming only that the talks were productive.
Sinn Fein even rebuked North Secretary Shaun Woodward for comments urging unionists to close the deal.