The Stormont finance committee has given DUP Minister for Finance Arlene Foster the go-ahead to begin rushing her so-called "fantasy" or provisional budget though the Northern Assembly next week.

Ms Foster, who on Wednesday evening met British Treasury Minister Greg Hands to discuss the Northern Executive's threatened financial crisis, was given permission to accelerate the passage of the budget Bill so that it could become law by the end of July.

“We will not get any additional money from Westminster,” Ms Foster said on Wednesday when she briefed the Assembly finance committee on the budgetary problems caused by the deadlock over implementing British government welfare reform.

‘Serious situation’

Ms Foster said that because of the welfare impasse, the Executive was financially in a “serious situation” which would be exacerbated if her provisional budget was blocked or delayed.

The decision by Sinn Féin and the SDLP to oppose the welfare element of the Stormont House Agreement, after initially endorsing the deal at Christmas, has held up the British government’s offer to release £2 billion (€2.79 billion) in grants and loan-raising powers to the Executive over the coming five years.

It has also put on hold a plan to devolve corporation tax-setting powers to the Executive.

Northern Secretary Theresa Villiers has insisted these elements of the Stormont deal can only be implemented when all parties sign up to welfare reform.

This has resulted in a £600 million shortfall in the Stormont budget for the rest of this financial year.

Welfare stalemate

However, under Ms Foster’s “fantasy” budget - although she prefers the term provisional - she is assuming the additional resources available through the Stormont House Agreement for this year will become available - even though they won’t be if the welfare stalemate is not ended.

She said her budget was “predicated on welfare reform going ahead”. The budget would allow monies to be released to the North’s various departments to allow the continuing running of government.

It delays rather than solves the financial problem as, without agreement on welfare, the £600 million deficit will kick in later in the year, probably at some point in the autumn.

Her proposal also postpones the real possibility of the permanent secretary of the Department of Finance being forced to take over responsibility from the politicians for implementing a reduced budget.

It also puts back for a while the possibility that the British government may take over responsibility for welfare from the Executive.

Were this to happen, there is a possibility of Martin McGuinness standing down as Deputy First Minister - a move that could threaten to precipitate Assembly elections or even suspension and a return to direct rule from London.

The Minister indicated her provisional budget would buy some time to determine if the welfare logjam can be ended.

‘Derogatory remarks’

“I know that there have been derogatory remarks in the media about fantasy budgets. Let me assure you I am not delusional, I know exactly what I am doing,” Ms Foster told the finance committee.

The Minister discussed the budgetary matters with British Treasury Minister Mr Hands on Wednesday.

So far, British Ministers have insisted they will not compromise on welfare.

British Chancellor of the Exchequer George Osborne on Tuesday said it would be "unacceptable" for the Stormont administration to overspend its budget by £600 million.

"We have a clear agreement in the Stormont House Agreement, which we now expect all parties in Northern Ireland to implement, including Sinn Féin," Mr Wilson told DUP MP Sammy Wilson in the House of Commons.