A fresh initiative aimed at breaking the deep-seated parading impasse in north Belfast looks set to fail.
Secretary of State Theresa Villiers had been testing the political waters regarding the setting up of an independent panel whose sole job would have been to examine the Ardoyne stand-off.
She had been expected to announce proposals for the new body this week, but delayed that following a nationalist and republican backlash against her plans.
Ms Villiers held two days of talks with the five Executive parties regarding the venture. She also had discussions with the Parades Commission.
The panel proposed by Ms Villiers would have had no legal standing and it is understood that it would have produced findings as opposed to recommendations.
It would have contained people from academic, church and business backgrounds, with its membership suggested by the political parties.
The latest proposals followed a call from the Belfast Telegraph earlier this month for a commission headed by a UK judge, who could compel witnesses to attend. The idea was welcomed by the unionist parties.
A unionist source last night described the talks with Ms Villiers this week as "productive" and accused the SDLP and Sinn Fein of lacking leadership on the contentious issue.
Yesterday the SDLP rejected the establishment of the panel before Ms Villiers had even explained it.
And speaking after a Sinn Fein delegation met the Irish Minister for Foreign Affairs, Deputy First Minister Martin McGuinness said: "I made clear to the Minister for Foreign Affairs that the parties who are part of these institutions need to recognise that any approach which is about merely satisfying the demands of the combined unionist and loyalist parties and the Orange Order will not work and is a mistake."
But the unionist source, who was part of the this week's talks, said the latest move should be considered "positive".
"The idea of the panel was to develop dialogue and we are receptive to listening to any proposals," they said.
"The SDLP and Sinn Fein are not willing to discuss any of these issues and take them on. It's disappointing. The point is they have been trying for local dialogue for many, many months with no agreement or prospect of agreement. They're taking a line to retain the status quo."
Ms Villiers said: "I have not been prescriptive about what the answer is. It would be an important pre-condition that whatever was set up did not undermine the Parades Commission.
"There is a need for something to be done to try and do more to bring people together to build mutual trust and understanding in north Belfast, but certainly views are sharply divided about what that might be and what might be appropriate."
Unionists continue to push for a commission of inquiry, an idea first put forward by this newspaper.
SDLP leader Dr Alasdair McDonnell said his party would not agree to any action that undermined the Parades Commission.
"We told the Secretary of State very firmly that the unionist proposal for a new commission would undermine local dialogue, the Parades Commission and the courts, and this must not be allowed to happen," he said
"The unionist-proposed commission has the potential to send community relations back 15 years. The Parades Commission is the lawful and independent body tasked with making determinations on parading, and while the SDLP might not always agree with those determinations, we always accept them and always urge others to do so too."
Loyalists have staged a protest camp at Twaddell Avenue in north Belfast for more than a year after three Ligoniel Orange lodges were banned in 2013 from staging their return Twelfth parade along the Crumlin Road past the Ardoyne shops.
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Over the past 12 months, more than £10m has been spent on policing the Twaddell camp and associated protests. Those involved in the demonstrations vowed to continue them after a Twelfth parade along the Crumlin Road was again blocked this year. Talks aimed at addressing flags, parades and the past collapsed at the beginning of this month when the two main unionist parties withdrew from meetings following a Parades Commission ban on the return leg of the July 12 Ardoyne parade. The five main parties – DUP, Sinn Fein, UUP, SDLP and Alliance – were involved in the talks.