Shadow Secretary of State Owen Patterson said that all the hard work of the US Investment Conference (in May) "has been wasted and investors are thinking long and hard whether they want to develop their businesses, in an area without an effective Government".

Speaking at a Queen's University Young Unionist Association meeting, he also took questions from the floor on the proposed link-up between his party and the Ulster Unionists, claiming now was "the perfect time" for such co-operation, as the Union was under threat from nationalism, in Scotland and elsewhere.

The Tory MP said that if the current impasse at Stormont is not resolved soon, then it will begin to have "a serious impact" on Northern Ireland.

He continued: "In May of this year I was greatly encouraged to see such a large number of powerful American executives and other business leaders taking the time to come over and listen to Northern Ireland sell itself as a real player in modern day business.

"Many of them were very pleasantly surprised at what they had seen. However, they only need to take a look now at how different the situation is; the Executive is refusing to meet and the local business community here is absolutely disgusted at the current deadlock, and rightly so in my opinion.

"Gone, it seems, is any hope of major US investment bringing both new jobs and investment to the country. Instead of holding the country to ransom, the DUP and particularly Sinn Fein need to get back around the table and sort these problems out the mature way."

On the talks between the Conservatives and UUP, he told members of the UUP's youth wing, "I believe fundamentally that the Union between all four corners of Britain is best served if they all have a real input into the Government.

"Currently the local 18 MPs make up only a fraction of the 645 seats in the Commons, so therefore they have little real power in the day-to-day governance of the United Kingdom. We are trying to change that situation now so that any future UUP MPs and their constituents can reap the full benefits of being part of the Conservative organisation at Westminster."

He concluded: "Although a link would be beneficial for both the UUP and Conservative Party, I honestly believe it would have greater consequences for the future of unionism across the whole country.

"For too long now the UK has been too fragmented, and now with the greatest threat to the Union coming from nationalism within Scotland, I feel this is a perfect time for unionist parties such as the UUP and Conservatives to unite together to prohibit the disintegration of the United Kingdom."