'More progress needed' at Stormont
The political situation in Northern Ireland remains "very serious" despite an agreed budget plan that has lessened fears of an imminent collapse of power-sharing, the Government has warned.
Much more progress is needed before the destabilising impasse over welfare reform is resolved, a spokeswoman for Prime Minister David Cameron said.
The assessment from Downing Street came after Northern Ireland Secretary Theresa Villiers briefed Mr Cameron and fellow ministers at the weekly Cabinet meeting in London.
The prospect of the Stormont Executive crashing receded in the short term yesterday after Sinn Fein backed a budget plan that effectively pushes the crunch point further down the tracks.
The republican party has offered "conditional support" to a spending plan, dubbed by some as the "fantasy budget", that commits the Stormont Executive to a £600 million overspend for the rest of the financial year.
The Sinn Fein move does not bring a resolution to a huge political row over welfare reform implementation any closer but is designed to give local politicians more time to resolve their differences.
If Sinn Fein had opposed the Budget Bill it would have triggered a chain of events that would have forced a senior civil servant to take over spending powers from ministers in the five-party Executive next month.
Such an extraordinary measure would have put the future of power-sharing at serious risk.
The majority of the £600 million in-year shortfall in the Executive's budget is due to the failure by local politicians to implement December's Stormont House Agreement - a stalemate caused by Sinn Fein's refusal to introduce the UK Government's welfare reforms in Northern Ireland.
Following this morning's meeting, Mr Cameron's official spokeswoman said: "Theresa Villiers updated Cabinet on the situation in Northern Ireland and discussions with political leaders there about resolving the issues on welfare reform and the implications of not doing so.
"We are continuing to urge the political leaders in Northern Ireland to find a solution to this. That was the message from both the Prime Minister and the Taoiseach (Enda Kenny) after their bilateral at Downing Street last week."
Ms Villiers will chair the latest of a series of meetings to review the state of the Stormont House Agreement in Belfast on Thursday.
The PM's spokeswoman added: "The situation is very serious and clearly much more progress needs to be made. That's why the Prime Minister and Theresa Villiers have been urging the Northern Ireland parties to resolve their differences on this issue and that's why she will be chairing this meeting on Thursday.
"Our focus at the moment is very much on helping to bring the Northern Ireland parties together and encouraging them to find a solution."
Democratic Unionist Finance Minister Arlene Foster is taking the second half of January's original budget through its required stages of legislation at the Assembly.
The spending plan does not factor in the funding black holes, with Mrs Foster hoping that a resolution to the welfare deadlock can be found later in the financial year.
While the Executive struck its budget in January, the Assembly must vote twice a year to secure the legal authority to spend the money.
The first vote released 45% of the budget and Mrs Foster is seeking Assembly backing for the remaining 55%.
Sinn Fein's position was crucial as it has the Assembly weight to kill the spending plan.
Yesterday, Sinn Fein Deputy First Minister Martin McGuinness explained the decision to back the Budget Bill.
"The purpose of that is to create a space which hopefully will see a resolution of the difficulties that we face in relation to putting in place a sustainable and workable budget, and also see the full implementation of the Stormont House Agreement," he said.
"This is about creating a space. It's about trying to resolve the difficulties and it is about recognising there are huge challenges ahead in that regard."
The 2015/16 budget was shaped when the Stormont House deal between the British and Irish governments and the five Executive parties was still on track.
Since then the welfare element of the accord has been stymied by a Sinn Fein/SDLP veto - a logjam that has put the rest of the measures contained in the deal on hold.
If the budget is agreed but there is no resolution to the Stormont House Agreement impasse, the Executive's coffers will effectively run dry well before the end of the financial year next March.