The UK Government is preparing to impose a budget on Northern Ireland, James Brokenshire has announced.
The Northern Ireland Secretary insisted the move stopped short of a return to 'direct rule', and that it would be abandoned if the DUP and Sinn Fein could agree a deal before the deadline.
He added it would head off Stormont running out of money by the end of November.
Mr Brokenshire said: "No government could simply stand by and allow that to happen.
"I am, therefore, now taking forward the necessary steps that would enable a Budget Bill to be introduced at Westminster at the appropriate moment in order to protect the delivery of public services in Northern Ireland."
Mr Brokenshire also revealed he was taking legal advice on whether MLA – members of the Assembly – should keep being paid while deadlock remains.
But he said any interventions by Westminster should not be seen as a reason by both main parties to abandon negotiations.
"Let me be clear, this is not a barrier to continued political negotiations and the Government will continue to work with the parties with that intent," he said.
"And indeed, however unlikely, should an Executive be formed speedily enough and a means could be created to provide an exceptional procedure to enable the budget to be passed by the end of November I would be prepared to withdraw the Budget Bill in order for Assembly to legislate for itself."
Northern Ireland is now in a 10-month deadlock that has left the region without a devolved administration.