Stakes are high says Villiers
Northern Ireland Secretary Theresa Villiers has insisted the "stakes are high" when talks to resolve a series of major disputes resume this week.
Ms Villiers said all parties agreed a failure to secure an agreement before Christmas would threaten the chances of such a deal for months or even years.
She added to MPs in Westminster that the Northern Ireland executive would be left increasingly unable to conduct day-to-day business effectively if a balanced budget was not agreed.
Replying to an urgent question from Labour, Ms Villiers said: "The talks resume this week and the stakes are high.
"All parties agree that if there's no agreement before Christmas, we won't get this close for months or even years.
"In particular, failure to agree a balanced budget would leave the executive increasingly unable to conduct even the ordinary day-to-day business effectively.
"So this week is crucial. All of us have the responsibility to do whatever we can in the few days left to us.
"The UK Government has shown it can compromise even over hugely sensitive and difficult issues regarding Northern Ireland's past, and even when resources are constrained by the pressing need to deal with the deficit.
"We'll continue to do all we can to deliver agreement within the financial constraints in which we're operating.
"But the UK and Irish government can only do so much. Ultimately whether an overall agreement is reached is down to Northern Ireland's political leaders.
"They have the chance to show that once again they can move Northern Ireland forward towards a better future, where politics works, the economy grows and society is stronger and more united.
"That's the prize on offer and I know that all the participants in the talks will have the support and goodwill of this House in their attempts to seize it."
Ms Villiers said about 90 hours of formal talks had taken place since the process began in October.
Prime Minister David Cameron and Irish Taoiseach Enda Kenny took part in the talks directly from last Thursday, resulting in the tabling of a range of proposed solutions on vexed wrangles on flags, parades, the legacy of the past, reform of the Assembly and the executive's serious budget crisis.
Draft proposals included seeking a commitment from the executive to press ahead with welfare reform - including flexibilities to reflect Northern Ireland's circumstances - implement a "serious efficiency programme" for long-term savings, Ms Villiers said.
Mr Cameron also set out proposals that would have given the executive nearly £1 billion of extra spending power to "help them through their current difficulties and support their most important priorities", Ms Villiers said.
She added it also included the devolution of corporation tax, telling MPs: "A change which just a few years ago seemed inconceivable and undeliverable is now in the grasp of Northern Ireland's leaders if they choose to take it."
Shadow Northern Ireland secretary Ivan Lewis accused the UK Government of "three years of relative disengagement" in relation to Northern Ireland, claiming this damaged trust and weakened mutual understanding.
He said it had to be recognised Northern Ireland faces unique challenges relating to the past while there should be "no blank cheques or exemption from tough choices".
Mr Lewis: "Northern Ireland has the right not to implement aspects of Tory-Lib Dem welfare cuts but a refusal to implement any welfare reform is neither affordable nor credible."
He asked for more information on the £1 billion of extra spending powers offered by Mr Cameron, adding to Ms Villiers: "Prime ministers usually attend political negotiations either to announce an agreement or to roll their sleeves up and stick around to make an agreement possible.
"As the Prime Minister did neither, can you explain the strategy underpinning his flying visit to Belfast last week and do you expect him to further engage in talks before Christmas?"
He also told MPs: "Christmas is meant to be the season of goodwill but in Northern Ireland, for a second consecutive year, there's a real risk it will be a season of entrenched mistrust and political failure."
Ms Villiers insisted it was "most emphatically not true" the UK Government had not been engaged in the process in recent years and insisted the Prime Minister "did indeed roll up his sleeves" when he attended the talks.
On the breakdown of the spending powers, Ms Villiers said: "The Prime Minister outlined a contribution of £10 million a year towards the running of the historical inquiries unit, which is proposed in the draft heads of agreement.
"The Government would also approve the use of Northern Ireland's existing allocation of £200 million of the reinvestment and reform initiative borrowing for 2015/16 to implement an exit scheme for the Northern Ireland public sector to be used in that financial year - that includes the £100 million already sought by the executive as part of its draft 2015/16 budget.
"The Government would agree that the executive may use a further £100 million of its RRI borrowing power in each of the five subsequent years, beginning in 2016/17 for the same purpose.
"The Prime Minister also set out plans to support the establishment of the peace and investment fund proposed by Northern Ireland's leaders, including allowing the Northern Ireland executive to keep additional funds generated from asset sales in the financial year 2015/16 after achievement of a balanced budget."
Former Northern Ireland Secretary Peter Hain said he was "troubled and astonished" that the prime minister had left the summit prematurely.
He told MPs: " My experience is he - that is to say any prime minister - has to coax and progress the discussions and the negotiations. There is a chemistry about these and a momentum that is possible to develop.
"If he walks away as he did, it effectively leaves a kind of political paralysis which I suspect and I fear may continue.
"I think this is extremely damaging and I'm extremely worried about the situation."
Ms Villiers insisted the prime minister had not walked away and added: "He continues to follow these matters with the greatest of attention because he cares about Northern Ireland and wishes to see a successful conclusion to this process."
Paul Murphy, also a previous Northern Ireland Secretary, asked how the prime minister could come to the conclusion after just 24 hours that there was no realistic way of reaching a consensus.
He said: "Over the years both with the Good Friday Agreement and the St Andrews Agreement there were weeks, months, even years where the prime minister actively acts as someone who tries to ensure there is a consensus.
"I think you had better get back to Downing Street and persuade him to go there again."
Independent MP Lady Hermon (North Down) added that Mr Cameron's "failure" had caused "considerable disappointment".
Conservative Nigel Mills (Amber Valley) asked Ms Villiers to confirm there would be no bigger offer than the £1 billion put forward.
She said the solution could not be a big cheque from the UK Government because it would not solve the problem and there was no more money.
Labour's Kate Hoey, who sits on the Northern Ireland affairs committee, said progress would be difficult while there was still so much secrecy about the On The Runs.
To that end she called for "openness and transparency " from Tony Blair, who has been summoned to appear before the inquiry, so it can be finished.
Alliance MP Naomi Long (Belfast East) said the existing devolution settlement was at stake if an agreement was not reached because the Assembly could not function without a budget.
Ms Villiers accepted time was running out and insisted it was crucial to seize the opportunity.
Democratic Unionist Sammy Wilson said the main reason the talks failed was Sinn Fein's "deluded belief" that Northern Ireland should be totally exempt from the implications of UK budgetary policy and welfare reform.
He asked: "Can you confirm and put on the record for those head-in-the sand ostrich economists who advise Sinn Fein that if Northern Ireland wishes to deviate from the welfare reform package which is available in the rest of the UK that that money must found from the Northern Ireland block grant and that there is no additional money available?"
Ms Villiers replied: "Yes, I can certainly do that. There will be no new money for welfare reform."
Labour's David Anderson (Blaydon) accused Mr Cameron of having the "attention span of a gnat".
The secretary of state dismissed the remark as "nonsense" and added: "The prime minister made a realistic offer and remember what the prime minster can put on the table by way of financial assistance is obviously severely constrained by the huge mess that Labour made of the economy within the years when they were in Government."
Speaking outside the House, Sinn Fein Newry and Armagh MP Conor Murphy said the Northern Ireland Secretary must end the "pretence" that the British government was a neutral broker.
"There is unanimity among all the political parties that the financial offer made by David Cameron and his British government was derisory.
"The British Government is a key player in the current talks and is responsible through its austerity policies and year-on-year cuts to the block grant for the financial crisis facing the Executive."
He said it refused to honour commitments made in the Good Friday and other agreements surrounding an Irish Language Act, an inquiry into the murder of solicitor Pat Finucane and a Bill of Rights.
"And Theresa Villiers has adopted a partisan pro-unionist approach to the parading issue pandering to a unionist demand for an Orange Order parade through a nationalist community in North Belfast
"Ms Villiers is also attempting to put further obstacles in the way of families trying to get truth and justice through coroners' courts.
"We are committed to finding a solution and a way forward in the ongoing talks. But that requires the British Government to step up to the plate and end its pretence that it is a disinterested party."
In the House of Lords, Lord Maginnis of Drumglass, an independent Ulster Unionist, accused Ms Villiers of being "negligent".
He said the Prime Minister had arrived "without any consultation that I'm aware of with anyone who went through the entire talks process from 1994 to 98, in fact longer than that".
"The Secretary of State has been negligent in her liaison with those who have experience not only of the political problems but of the terrorist problems we suffered in Northern Ireland for 28 years," he said.
"It's quite ridiculous to assume that somehow a 24 or 48 hour visit will have the slightest impact on some of the problems we face."
The Government's Northern Ireland spokeswoman in the Lords, Baroness Randerson, denied ministers were at fault for a lack of hands-on engagement.
"That is what happens when you abide by the terms of the devolution agreement," she said.
"It is essential that if Northern Ireland is to recover from its past then the politicians of Northern Ireland and the structures of Northern Ireland have to be allowed to develop, to bed in, to grow and to work."
Defending Ms Villiers, she said it was "unacceptable to suggest the secretary of state has been anything less than totally dedicated to these talks".
"She has worked on this every week, strongly and personally, since October and has made every effort to ensure the talks were successful," she added.