Fresh talks are to be held to try and break the political stalemate in the North’s peace process by Christmas, the British and Irish governments have signalled.

Speaking on the opening day of the Conservative Party conference in Birmingham yesterday, Northern Secretary Theresa Villiers said: "The time is now right for a new round of cross-party talks." Discussions will take place over coming days with the North's parties to agree an agenda, but London is determined to keep the number of issues tabled to a minimum.The Stormont parties have failed to agree welfare reforms that threaten a £1 billion cut in the North's budget, and there are also continuing divisions about how to deal with the past.

Concessions

Welfare reforms require concessions from Sinn Féin and the SDLP, Ms Villiers said, saying London has “no more to give” since it has already made “significant” concessions. “It’s now essential that the nationalist parties show they can make the hard choices of responsible government,” Ms Villiers told delegates.

She also said the unionist parties “urgently need” to get back around the table to tackle the legacy issues which so often embitter community relations.

Disputes over flags, parades and the past, she said, “are consuming ever increasing amounts of time and resources . . . . particularly where they spill out on to the streets”.

Ms Villiers hinted that a decision by London to grant Stormont freedom to set its own corporation tax rates – now expected well before Christmas – could hinge on progress being made in the talks.

Political impasse

Discussions have been held over the last couple of weeks between Ms Villiers and Minister for Foreign Affairs Charlie Flanagan, who welcomed her public statement last night.

Mr Flanagan said all-party talks are needed to overcome the current political impasse within the Executive – particularly on legacy issues.