Sinn Fein's Conor Murphy says an election is a "distinct possibility" if Arlene Foster does not step aside as First Minister in the New Year.
However, he said it was important politicians worked to get to the bottom of the RHI scandal to avoid the cost of an election.
Asked what his party would do if Arlene Foster did not step aside on the basis of the motion his party intends to put before the Assembly, he said an election was a "distinct possibility".
"If this isn't resolvable we could be into an election, it's a distinct possibility," he told the BBC.
"If this issue cannot resolve itself there is a possibility of a break down of the institutions and we will face that.
"We are in the mode of working to resolve this issue of trying to get the DUP to see sense of trying to get to the bottom of this of holding people to account.
"If the whole process breaks down, then inevitably it leads to an election.
"But let's apply ourselves to avoid that costs on people as well."
Mr Murphy said they would continue to argue for Arlene Foster to stand aside as she was "centrally involved in the discussions around this".
"There is a real issue of public confidence and the DUP have a responsibility here," he added.
"We don't want to bring down the institutions, but we are very firm in the view that the institutions have to work and function properly and particularly in the eyes of the public that they do so.
"They are not at the moment there is an issue in a crisis of confidence. It's caused by the DUP who are our main partners in the institutions and their behaviour in relation to the scheme and the allegations around that.
"And that needs to be fixed.
"This will be met in January and this will be faced down. And if it doesn't work we are in a position the institutions break down.
"We have put a proposition in that we need a series of measures and we are saying this is what is needed to fix public confidence."
The MLA said his party were focused on making the institutions work.
"But that needs the DUP to wake up to the reality of what's going on around them," he went on, "and to come out from behind the wagons and to actually recognise the public confidence issue that has occurred over their handling of this situation and what they are doing to restore that public confidence."
The Stormont Assembly has been plunged into crisis after all non-Democratic Unionist Party (DUP) members walked out ahead of a disputed statement by the First Minister on her role in a botched renewable energy scheme.
The curious thing is that the same stereotype traditionally existed in French society, just as it did here in the Republic of Ireland. I mean the notion that Protestants are more honest, direct and upright in the conduct of their professional lives, than their Catholic neighbours.