NI talks: No progress made over welfare reform says Theresa Villiers

No real progress was made during talks on welfare reform on Tuesday, Secretary of State Theresa Villiers has said.

Inter-party talks in Northern Ireland began last month in a bid to resolve the current political crisis at Stormont.

The two key issues being discussed are the impasse over welfare reform and paramilitary activity.

"We didn't make any real progress on the welfare issues we discussed this morning," Ms Villiers said.

"There is still a long way to go. It is crucial that the welfare and finance provisions of the Stormont House Agreement are implemented because if they are not, more and more money will continue to pour into an unreformed high cost welfare system in Northern Ireland, leaving less and less for crucial front line public services.

"That could threaten the whole future of the devolved institutions."

The current crisis at Stormont was triggered when police said they believed IRA members had been involved in the murder of a former IRA man in Belfast in August.

The parties have also been deadlocked over the issue of welfare. The Northern Ireland parties had agreed on a welfare reform deal in December but Sinn Féin withdrew its support in March.

Earlier, Ulster Unionist leader Mike Nesbitt said Prime Minister David Cameron was right to set an end of October deadline for an agreement in the talks.

Mr Nesbitt said it was time for decisions to be made.

"I have said consistently these talks were kill or cure for this round of devolution," he said.

"We have to come to a deal, because people's lives are at risk because of the health service being in crisis. That alone needs to focus us as responsible politicians."

Mr Nesbitt, who is attending the Conservative Party conference in Manchester, said his party was playing an "imaginative" role in the talks, but said he was concerned that Sinn Féin and the DUP would come up with an incomplete deal on their own.

"What I fear is there will be a sticking plaster solution carved out between Sinn Féin and the DUP. When we get to that point we'll make a decision," he said.

Sinn Féin's Pat Doherty, who is also at the conference, said his party was in contact with the DUP about finding a solution.

"There is some potential for progress there, but it remains to be seen if both of us can get across the line," he said.

"Deadlines are set and we should try to do that, but I don't think that's the crucial thing. I think the crucial thing is that we come to a resolution that all the parties can sign up to."

Mr Doherty also said there had to be more money for welfare in Northern Ireland.

"The key thing is that the British government seriously face up to the fact that we need collectively a workable budget and we do not have one," he said.

On Monday, Ms Villiers said there had been open and candid exchanges on the issue of paramilitaries during talks.