Britain set to take further budgetary control of Northern Ireland

LONDON (Reuters) - Britain must take steps towards setting a budget for Northern Ireland while it explores whether agreement can be reached to restore the province's power-sharing government, the British minister for the region said on Tuesday.

The province has for over a year been without a devolved executive that was central to a 1998 peace deal that ended three decades of violence. Talks between the pro-British Democratic Unionist Party (DUP) and Irish nationalists Sinn Fein to end that stalemate broke down yet again last week.

Britain has already moved towards governing the region directly for the first time in a decade, setting a budget late last year that runs until the end of March, and minister Karen Bradley also raised the prospect on Tuesday of cutting assembly members' pay if an executive cannot be formed.

"We will continue to explore with the parties whether the basis for a political agreement still exists. That is this government's clear hope and desire," Karen Bradley told Britain's parliament.

"However, things in Northern Ireland cannot stay in a state of limbo... I intend to take steps to provide clarity on the budget... In the absence of devolution, it is also right that we consider the issue of salaries for assembly members."

Both the British and Irish governments have said they want to get talks back on track but neither have suggested when the two sides should return to the negotiating table.

Many fear a return to full British direct rule would further destabilise a delicate balance between nationalists and unionists who, until the triggering of snap elections last year, had run the province together since 2007.

Northern Ireland's political future is also tied up with wider negotiations on Britain's divorce from the European Union, which will determine whether a physical infrastructure will be required to control the border between the province and the Republic of Ireland.

Bradley said London would not shirk its responsibilities to provide political stability in the region longer term but would only do so once all other viable options had been exhausted, including her statutory obligation to consider calling fresh elections.

(Writing by Padraic Halpin in Dublin; editing by Mark Heinrich and John Stonestreet)