Hope for deal on Northern Ireland
Northern Ireland's politicians have got down to business as the talks enter their final days, Theresa Villiers has said.
The Northern Ireland Secretary urged them to make further compromises on issues surrounding contentious flags, parades and dealing with the past. An agreed paper from the five parties on the devolved powersharing administration's budget and welfare reform is being considered seriously by the Prime Minister's officials, she said.
But the Conservative Cabinet member warned that negotiations which have continued for 10 weeks in Belfast could not continue into the New Year when the general election campaign will begin.
"In the last 48 hours or so, the parties are looking at these issues with a seriousness which has been enhanced.
"There is a more determined and business-like approach than we have seen over the last 48 hours or so which we probably have not seen in the first 10 weeks."
The powersharing administration at Stormont faces £200 million cuts to its budget unless measures imposed by Westminster to reduce the benefits bill are introduced in Northern Ireland. Teachers, students and the health service could be badly affected, unions and business leaders have said.
Sinn Fein has been adamantly opposed to the changes and was at loggerheads with its powersharing partners the Democratic Unionists over the issue. Now a greed proposals from the Stormont parties have been submitted to the Prime Minister.
Sinn Fein Deputy First Minister Martin McGuinness and Irish Foreign Affairs Minister Charlie Flanagan struck an optimistic note.
Mr McGuinness tweeted: "A step change in negotiations!! Our team focused but more to do!!"
Mr Flanagan said: "Substantial progress has been made in negotiations over the past 24 hours. Intensive engagement continues."
The British and Irish governments have led efforts to resolve the stand-off, with Ms Villiers and Mr Flanagan chairing negotiations at Stormont.
Ms Villiers said: "There does seem to have been a degree of progress overnight.
"We will look at the paper very seriously but our response is going to have to take into account the realities of the deficit we inherited from the previous government and the limited resources we have.
"We are always going to be constrained by financial realities, every government in the developed world has had to take difficult decisions to rein in spending. It would be in nobody's interests if our plans to tackle the deficit are put back."
She said No 10 and the Treasury were looking at the proposals.
"In the meantime it is crucial the other parties keep at it with the other issues."
She said the consequence of failure could mean the five-party ministerial Executive becoming dysfunctional and warned that government structures were under increasing strain.
"We are in the final days of this process so the parties need to make their decisions on these issues as soon as possible."
She added: "If we don't do this before Christmas, we are not going to succeed in doing it. Everyone knows that the January of an election year is effectively the start of a campaign - making these types of compromises in an election year will be extremely difficult for Northern Ireland.
"They have very limited time now but it is a prize worth grasping."
The negotiations ended without agreement a week ago despite the presence of Prime Minister David Cameron and his Irish counterpart Enda Kenny.
Mr Cameron offered the Northern Ireland parties what he said was almost £1 billion of extra spending power. The DUP and Sinn Fein rejected the proposal as not good enough.
DUP enterprise minister Arlene Foster has said the consequences for the political process of not striking a deal could be dire.
It is understood Northern Ireland leaders are seeking a financial package from Westminster worth £2 billion over the next decade.