As efforts to revive power-sharing by March 26 continued in Northern Ireland, British Government sources confirmed that they would press ahead with plans for an Irish Language Act if unionists and nationalists failed to set up a devolved government this month.

A source said, "The Secretary of State (Peter Hain) has been in discussion with business leaders in the House of Commons."

"He has been enquiring as to how soon we could press ahead with the legislation."

"We are satisfied that this legislation would be in place by the end of the year, certainly by Christmas."

Under the Bill produced by the Department of Culture in Belfast the Irish language would be given a recognised status.

The Department has proposed the appointment of an Irish language Commissioner and the establishment of language schemes for public bodies.

It is also being suggested that Irish could be used in court proceedings and official documents could be printed in the language.

If a power-sharing government is formed in a week's time, the Government has said the Assembly will take responsibility for legislation governing the Irish language.

Nationalists have long campaigned for the legislation along with Irish speakers.

However, the latest suggestion from the British Government will be interpreted as putting further pressure on the Rev Ian Paisley's Democratic Unionists to enter into government with Sinn Fein on March 26.

Mr Paisley's party has insisted they need to be convinced that Sinn Fein's recent move to support the Police Service of Northern Ireland is being matched by real action in republican neighbourhoods across the province.

But the DUP has also warned that any decision it makes on power-sharing will be influenced by the size of a financial package from Chancellor of the Exchequer Gordon Brown to bolster devolution.

Mr Brown will meet Northern Ireland's political leaders on Thursday to discuss the package.

In recent days Northern Ireland Secretary Peter Hain has been adamant that the Assembly will close down and salaries to the 108 MLAs will be stopped if the March 26 deadline is missed.

The British Government, along with the Irish Government, is expected to put in place their Plan B in the event of there being no power-sharing.

This is believed to involve increased co-operation between Northern Ireland Office ministers and their Irish Government counterparts including more cross-border bodies.

Mr Hain's team of ministers are also expected to press ahead with plans for the introduction of controversial water charges next month, the end of academic selection for post-primary education, a major overhaul of local government in Northern Ireland and public bodies and the reform of the rates system.