British Prime Minister Gordon Brown today said a crunch summit to save the power sharing government in the North had failed to secure a settlement but insisted a "pathway" to an agreement had been laid.
Speaking alongside Taoiseach 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."
Sinn Fein said it was "deeply disappointed" with the outcome of the talks and blamed DUP demands for a concession on loyal order parades for blocking an agreement.
Deputy First Minister Mr McGuinness, flanked by senior party colleagues including president Gerry Adams, said: "I believe we have displayed extraordinary patience and commitment over the past 18 months as we sought to persuade the Democratic Unionist Party to be partners of progress.
"Over recent days the two Governments have joined that effort.
"The decision by the DUP, at the behest of the Orange Order, to make the abolition of the Parades Commission a pre-condition for the transfer of powers on policing and justice flies in the face of all that."
First minister, and leader of the DUP party, 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.
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."