Northern Secretary James Brokenshire and Sinn Féin have warned that a number of issues still remain to be resolved before a DUP-Sinn Fein deal is struck to restore the Northern Executive and Assembly.
Real progress has been made following recent rounds of intensive negotiations between the two parties, according to several sources.
On Wednesday the Minister for Foreign Affairs Simon Coveney hoped a deal would be done before the end of this week while at Westminster parliamentary time has been made available to reinstate Stormont powersharing next week should a deal be struck. Andrea Leadsom, the leader of the House of Commons said she was "hopeful" of good news from the talks.
A number of sources said that progress has been made on the key contentious issue: how to deliver Irish language legislation that would be acceptable to both Sinn Fein and the DUP.
Sinn Fein’s Northern leader Michelle O’Neill and Mr Brokenshire however counselled against any presumption that a deal is guaranteed – notwithstanding a sense of growing optimism that agreement will be reached.
“There are still very real challenges to be addressed in the talks if we are to have political institutions which deliver for, and enjoy the confidence of all citizens,” said Ms O’Neill.
“The two governments have a responsibility to ensure previous agreements and commitments are implemented,” she added.
Mr Brokenshire also was cautious in his commentary on Thursday. He said that clear differences remained between the DUP and Sinn Fein, and that a deal has not been reached despite recent progress.
He warned again that in the absence of a deal he would be bound to begin introducing legislation at Westminster for a Northern Ireland budget. “I want to be in a position to legislate to form an Executive as soon as possible but to do so I would need to be satisfied that there is agreement between the parties,” he said in Belfast.
“Whilst this remains possible — and some progress has been made — clear differences still remain between the parties and agreement has yet to be found. If this cannot be resolved quickly, I will need to legislate for a budget for Northern Ireland by the end of this month and consider next steps.”
Mr Brokenshire said that “now is the time for the parties to look beyond their differences, harness a spirit of compromise and reach agreement”.
Without an imminent deal greater intervention from London risked becoming inevitable. “This would be a big step backwards, a step I do not want to have to take,” he added. “But I will not shirk from my ultimate responsibility for good governance and political stability in Northern Ireland.”