Speaking to reporters in Westminster, the spokesman said today's deadline was "always designed to get us to the point where you have a power-sharing Executive".

Mr Hain has repeatedly stressed that there would be "devolution or dissolution" by March 26 and that the deadline was absolute.

The first meeting between the leaders of DUP and Sinn Fein was an " outcome that few people will have predicted," he said.

"If you have an agreement about the way forward, then that too supersedes everything," he added.

The spokesman was speaking minutes after Ian Paisley and Gerry Adams started their historic face-to-face meeting.

He said: "This is probably a moment that we will remember.

"I don't want to pre-empt anything but the whole point of the peace process has been to get to a stage where Northern Ireland politicians meet and decide the future of Northern Ireland.

"If we have reached that point the significance of that cannot be overstated."

A statement to the Commons has been timetabled to be heard tomorrow afternoon.

This would allow the Government to announce the emergency legislation needed to extend the deadline.

Mr Blair's spokesman said the British Government would not stand in the way of a new consensus on the way forward in Northern Ireland.

He said: "Let us be clear - if there's a consensus about the way forward the British Government isn't going to stand in the way of that consensus.

"The important thing is there has to be an agreed way forward. If that's in prospect then we will do everything we can to comply with that."