Parties in Northern Ireland have a "short few weeks" to strike a deal to save power sharing at Stormont, Secretary of State James Brokenshire has said.
With a deadline for forming a new ruling executive following this month's snap election having elapsed yesterday without agreement, the UK government now either has to call yet another poll or potentially reintroduce direct rule from Westminster.
Mr Brokenshire indicated he will delay taking action to allow the region's political leaders some more time to resolve their differences.
Without an executive or agreed budget for the upcoming financial year, control of Stormont's finances will be handed to a senior civil servant tomorrow, albeit subject to tight spending constraints.
Mr Brokenshire said that was "not sustainable", making clear the final window for negotiations would not be allowed to drift. "I think there are a short few weeks in order to resolve matters," he said.
"The reason I say that is because of the stark issue in relation to public services here in Northern Ireland and the lack of a budget having been set, and therefore it is the impact on public services on having an extended period that is very much at the forefront of my mind in terms of the responsibilities that we have as the UK Government to provide that assurance to the public here."
The Democratic Unionist Party/Sinn Féin administration collapsed in January amid a bitter row over a botched green energy scheme. The subsequent snap election campaign laid bare a range of other contentious issues dividing the parties.
The Secretary of State rejected criticism of the UK government's handling of the talks to form a new executive and defended the fact UK Prime Minister Theresa May did not participate. He said the government had played a "positive and active" role and Mrs May had been kept updated throughout.
He declined to be drawn on calls for an independent mediator to be appointed to inject fresh impetus to negotiations that some politicians have described as a "shambles" to date.
Under current legislation, the UK government is required to call another snap election if a deadline for forming an executive passes. However, there is some room for manoeuvre, as there is no obligation to set a poll date immediately, rather within a "reasonable period".
Making a public statement at Stormont House, Belfast, after the 4pm deadline passed yesterday, Mr Brokenshire said there was "no appetite" for an immediate election.
The UK government could also theoretically go for the 'nuclear' option of reintroducing direct rule, but that move - which would require emergency legislation - looks unlikely at this stage at least.
Mr Brokenshire said there was "an overwhelming desire" among politicians and the public for "strong and stable devolved government".
Foreign Affairs Minister Charlie Flanagan said the context of Brexit made it all the more imperative that a new executive was formed as soon as possible.
"The absence of agreement on the establishment of an executive is, for many reasons, deeply regrettable," he said.
"However, it is particularly concerning that a vacuum in devolved government in Northern Ireland should now be occurring just as the island of Ireland faces up to the many serious challenges represented by the UK exit from the EU."