The latest move to break the north Belfast parading deadlock would have involved setting up a panel of representatives chosen by the main political parties.
The Secretary of State suggested that those individuals include representatives from academic, business and church backgrounds.
The panel would have had no legal footing or enforcement powers, and would have produced findings rather than recommendations.
If an agreement could have been reached between the parties, it is envisaged the panel would have been in place towards the end of September. The members would have spent their time focused solely on the north Belfast parading dispute and would have considered past efforts to resolve it.
The panel would have been publicly-funded, supported by a secretariat and would have worked to a timeframe, probably starting after the Assembly's summer recess and unlikely to extend into next year.
One of the issues raised by Ms Villiers was how such a panel, if produced, would sit with any resumption of all-party talks on flags, parades and the past.
The Villiers proposal is considered by some as a halfway house, falling short of the unionist call for a commission of inquiry, and leaving nationalist politicians viewing it as a sop to unionism.
Last week First Minister Peter Robinson led a delegation of unionists to meet the Secretary of State and he urged her to take up a solution to the parading impasse suggested by this newspaper.
Mr Robinson called for an independent commission of inquiry to be established to find a solution to the stand-off. The inquiry he suggested would be time-bound and would hear evidence, carry out research, talk to people, and initiate and oversee dialogue.
On July 4, a Belfast Telegraph editorial said the current impasse over the Ardoyne issue was beyond the Parades Commission, Orange Order, politicians or residents' groups. This newspaper suggested a commission – headed by a UK judge who could compel witnesses to attend – which would speak to people beyond the self-appointed and self-motivated, to "hear the great unheard", to examine history and other marches, and to make recommendations ahead of next year's marching season.
Mr Robinson described the setting up of such a commission as a "common sense proposal".