DUP 'dashes hopes of Christmas deal' to revive powersharing in Northern Ireland despite sides being 'close' to agreement - as ministers hold fresh round of talks

The DUP has dashed hopes of a deal to revive powersharing in Northern Ireland before Christmas.

Speculation had been growing that an agreement might be reached before the House of Commons goes into its festive break tomorrow, with the sides said to be close.   

However, despite Cabinet minister Chris Heaton-Harris convening another round of talks at Hillsborough Castle the unionists have ruled out sealing a pact before next week.

A DUP spokesman told the BBC: 'The DUP is condition-led not calendar-led.' 

For Northern Ireland's institutions to function the largest unionist and nationalist parties have to share power.

That would mean Sinn Fein taking the role of First Minister for the first time, as they topped last year's election ahead of the DUP.

However, the Stormont Assembly and Executive have been effectively collapsed for almost two years as the unionists campaign against post-Brexit trading arrangements. 

Rishi Sunak sealed the Windsor Framework with the EU earlier this year in a bid to overcome concerns that the integrity of the UK is being undermined, but so far it has not addressed all the DUP's concerns.   

The UK Government has offered a lump sum to settle outstanding public sector pay demands and a new fiscal floor for Northern Ireland, but it is dependent on a restored powersharing administration in Belfast.

On Saturday DUP leader Sir Jeffrey Donaldson told party members the Government needs to provide 'much more' in its offer for Northern Ireland.

However, Sinn Fein MP John Finucane called on Sir Jeffrey to 'seize momentum' behind the talks and to return to powersharing.

The Northern Ireland Office said the discussions resuming on Monday will build on last week's engagements on public finances and ensuring that the Executive is able to 'return on a stable footing'.

Officials from the Government and Northern Ireland Civil Service will also support further technical discussions on these issues.

Mr Heaton-Harris said: 'I welcome the constructive discussions we had with the parties over the last week.

'The parties have had time to consider the generous package offered by the Government to support Northern Ireland's public services in the event that the Executive is restored.

'I look forward to discussing final details with the parties over the coming days.'