The Stormont talks process has collapsed without a deal after DUP leader Arlene Foster said there is no prospect of a return to devolved government for Northern Ireland.
Mrs Foster released a statement on Wednesday afternoon in which she called for the Westminster government to now set a budget.
The DUP and Sinn Féin have been involved in long-running negotiations aimed at ending the 13-month long political impasse.
On Monday, Prime Minister Theresa May and Taoiseach Leo Varadkar travelled to Belfast amid speculation an agreement was imminent.
However, hopes of a resolution have now been dashed.
Mrs Foster said: “Despite our best efforts, serious and significant gaps remain between ourselves and Sinn Féin - especially on the issue of the Irish language.
“I have made it consistently clear that unionists will not countenance a stand-alone or free standing Irish Language Act.
“Sinn Féin’s insistence on a stand-alone Irish Language Act means that we have reached an impasse.”
DUP MLA Simon Hamilton on the talks collapse
The DUP leader added: “As far back as last summer, I outlined my party’s willingness to reach an accommodation on language and cultural issues.
“However, I indicated that any such accommodation must be fair, balanced and capable of commanding support on all sides of our community.
“At the moment, we do not have a fair and balanced package.”
Key issues which have proved difficult for the parties to agree on included the Irish language, dealing with the past, and same-sex marriage.
But both parties had claimed progress had been made.
Sinn Féin responded to the latest development by putting the blame for the talks collapse squarely in the DUP’s corner.
The party’s Stormont leader Michaelle O’Neill said her party had worked to restore the institutions “on the basis of respect, integrity and equality for all sections of society”.
She added: “We had reached an accommodation with the leadership of the DUP. The DUP failed to close the deal.
“They have now collapsed this process.”
Mrs O’Neill further stated: “These issues are not going away.
“Sinn Féin are now in contact with both governments and we will set out our considered position tomorrow.
“The DUP should reflect on their position.”
Sinn Féin's Michelle O'Neill on the talks collapse
Mrs Foster claimed in Wednesday’s statement that she respected the Irish language, adding: “Respect for the unionist and British identity has not been reciprocated.”
She further stated that Northern Ireland had been “in limbo” for too long.
“I had dearly hoped that we could have restored an Executive and local ministers could have taken those decisions,” she said.
“That is not possible at this time. Northern Ireland is best governed by local ministers who are accountable to local people.
“Restoring a sustainable and fully functioning devolved government will remain our goal, but we will not accept a one-sided deal.”
The DUP leader added: “Any agreement to restore the Executive must be on a sensible basis.
“We cannot and will not be held to ransom by those who have refused to form an Executive for over 13 months.”
The talks collapse has been met with anger and frustration from other parties at Stormont – the SDLP, the Ulster Unionist Party, and the Alliance Party.
NI Secretary of State Karen Bradley on the talks collapse
Northern Ireland Secretary of State Karen Bradley said she still believes “the basis for an agreement exists” at Stormont.
“I would urge everyone to reflect on the circumstances which have led to this and their positions, both now and in the future,” she said.
“The position of the UK Government remains the same - devolved government is in the best interests of everyone in Northern Ireland and is best for the Union.”
She added: “We now need to consider practical steps.
“I will update Parliament when the House returns from Recess next week.”
Tánaiste Simon Coveney said he had spoken to the Northern Ireland Secretary and was briefing Taoiseach Leo Varadkar on developments.
“The announcement from the DUP is clearly very disappointing,” he said.
“As co-guarantors of the Good Friday Agreement, the UK and Irish governments have an obligation to uphold and protect the letter and spirit of that Agreement.
“We will need to reflect in the coming days on how best to do that.”