The leading civil servant in Northern Ireland’s finance department could step in to run public services if no deal is reached, the Assembly has heard.
The “nuclear” option may be reached by the end of next month if the welfare reform deadlock is not broken, new finance minister Arlene Foster said.
Northern Ireland faces large Treasury fines over of its refusal to implement benefits changes already established in Great Britain because republicans believe they will hurt the most needy.
A technocrat may be appointed to balance the public spending budget if negotiations between the DUP, Sinn Fein and the other main parties are not successful.
Ms Foster told the Assembly: “Those are pretty dogmatic and nuclear (options), if we get to that step we will be in a very severe situation.
“The most draconian is where the permanent secretary at the Department of Finance and Personnel steps in and I very much hope that the house recognises that is not a place where we want to be come the end of June.”
Negotiations were expected to begin this week between the five parties on a deal over welfare. Other provisos of the pre-Christmas Stormont House Agreement, like devolution of corporation tax, are dependent upon a settlement.
Deputy First Minister Martin McGuinness has called for the five parties to present a united front in negotiating for an extra £1.5 billion from Westminster.
Reappointed Northern Ireland Secretary Theresa Villiers has urged rapid progress on implementing the Stormont House Agreement.
Ms Foster said the business community would never forgive the Executive if it failed to deliver corporation tax powers.
“We must grasp the nettle and we must deal with it in the short window that is available to us.”
She added: “I don’t think the public of Northern Ireland will forgive us. Every person in this country will suffer if we cannot agree a budget.”