Blair hopeful that agreement can be reached to restore North's institutions

The British Prime Minister, Mr Tony Blair, has expressed the hope that the post-election situation in Northern Ireland can be…

The British Prime Minister, Mr Tony Blair, has expressed the hope that the post-election situation in Northern Ireland can be successfully managed and devolved government restored.

However, the Ulster Unionist MP, Mr David Burnside, warned British ministers yesterday that the political process had reached "stalemate" and called for the Assembly to be closed down in just 12 weeks unless the UUP, DUP, SDLP and Alliance Party could agree a "voluntary coalition" which would exclude Sinn Féin from government.

Mr Burnside's proposal for a 12-week deadline on efforts to restore power-sharing coincided with renewed behind-the-scenes attempts by pro- and anti-Agreement UUP Assembly members to agree the basis for a direct challenge to Mr David Trimble's leadership at the annual meeting of the Ulster Unionist Council scheduled for March. Mr Jeffrey Donaldson MP, is understood to be arguing that the leadership issue needs to be resolved before then.

At the same time The Irish Times understands the Lagan Valley MP is coming under strong pressure to defect and join the DUP, instantly making it also the largest unionist party in the House of Commons and boosting its plans to consolidate last week's election victory over the UUP. Amid evidence of uncertainty over the timing and tactics of a challenge to Mr Trimble's leadership, a number of senior unionists are also looking beyond that to an eventual "realignment" or coming together of unionist forces in direct response to Sinn Féin's dominance and its eclipse of the SDLP.

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Mr Blair was adjusting himself to the changed realities of the North's political landscape yesterday, when he acknowledged "a more difficult" situation while emphasising that some 70 per cent of the population had voted for pro-Belfast Agreement candidates.

Mr Blair also noted there was no sense that the immediate political deadlock would lead to any security crisis.

Speaking at his monthly press conference, the prime minister said: "It is a more difficult situation, yes. But it is one that we will have to manage and we are used to managing difficult situations in Northern Ireland. What is interesting to me is that there is no sense that the political situation which needs resolving is going to lead to a security crisis. On the contrary, people are looking at how they work the thing out in a peaceful and democratic way."

Mr Blair added: "I understand from the DUP that they are saying . . . they still want some form of agreement to go forward. We will have to take it forward and we will be acknowledging, I hope, the fantastic progress that has been made in Northern Ireland."

When he cancelled the Assembly election last May, Mr Blair told reporters: "There is no possibility at the moment of having an elected government out of it and if anyone believes that the DUP would offer an elected government, that is complete pie in the sky."