Amid indications that DUP leader Ian Paisley could tell Tony Blair tomorrow he needs more time, senior British sources insisted: "We cannot cut them any more slack."

And the Republic's Foreign Minister, Dermot Ahern, said the March 26 deadline had been endorsed by the people of Northern Ireland in the Assembly election less than a fortnight ago.

Northern Ireland Office sources also dismissed speculation that Mr Blair could effectively over-rule Secretary of State Peter Hain and allow more time to conclude a deal.

"The notion that when push comes to shove, the Prime Minister will step in and vary this is not on. Mr Hain has the full backing of the Prime Minister," a spokesman said.

As behind the scenes negotiations continue, the Government was also warning the DUP against concluding that, while a deal is unlikely by Monday, it might prove possible in or around May.

"Even by May you will have water charges in and academic selection will be ended," a senior source insisted.

With a flurry of activity expected over the next few days, including a meeting between Chancellor Gordon Brown and the party leaders, expectations over the economic package were also being lowered.

One source said: "On the water charges, some of the parties are saying to us, 'Unless you give us enough money to prevent the water charges we will go ahead and let you bring them in'.

"That's saying: 'If you don't do what we want you to do we will let you do what you want to do'."

Mr Brown is said to be prepared to offer a "considerable amount of money " if he is certain a deal to establish an Executive, including First Minister Ian Paisley and Deputy First Minister Martin McGuinness, has been achieved.

"But it (the money) is not telephone numbers," a NIO source indicated.

On Corporation Tax - one of the parties' key demands - some "equivalent" measures seem likely rather than a reduction to the same level as the Republic.

"It will not be a level playing field, but it will be a better playing field," a senior source said.

An Assembly would still have to find the money to finance water and sewerage reforms.

Mr Ahern, due to join Taoiseach Bertie Ahern to discuss the package and the role of the Dublin government in it with Sinn Fein president Gerry Adams tonight, said he hoped common sense will prevail.

"Some have sought to portray the deadline as a high-stakes game of political poker where, in the end, someone will blink, where there can only be winners and losers," he said in an article in today's Irish Times.

"It is not. Nothing could be further from the truth. If the deadline is not met, there will be no winners: only losers. And the biggest losers of all will be the voters in Northern Ireland who turned out in large numbers this month to elect a government - their government."

Mr Paisley, accompanied by deputy leader Peter Robinson and Nigel Dodds, is to meet Mr Blair again after the Budget speech tomorrow ahead of a full DUP executive meeting being organised for later in the week.

The meeting comes amid reports of unease within the DUP's senior ranks, reflecting the Belfast Telegraph's straw poll last week of the party's MLAs.